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GMR Infrastructure to unlock value for its stakeholder

Published on Friday, April 3, 2015 by Dilip Davda | Modified on Wednesday, July 22, 2015

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GMR Infrastructure to unlock value for its stakeholder

GMR infrastructure is all set to unlock value by listing its subsidiaries. GMR Infra is a holding company with investments engaged in specific infrastructure projects. GMR operates through five reportable segments: Airports; Power; Roads; Engineering, Procurement & Construction (EPC); and Others. It was formed to fund the capital requirements of various infrastructure projects across the sectors. It has successfully employed the public-private partnership model to build a portfolio of high quality assets. The financial closure of the company is over and all the subsidiaries have started generating cash flow.

GMR infra's top line is expected to rise significantly going ahead as the assets have moved from construction to operational phase. GMR infra currently operates three international airports including, one each in Delhi and Hyderabad in India; and one international airport in Philippines. GMR operate India’s largest Delhi's Indira Gandhi International Airport (IGIA), through a joint venture, Delhi International Airport Private Limited (DIAL) which is a joint venture between GMR (54%), Airports Authority of India (26%), Fraport AG (10%) and Malaysia Airports Private Limited (10%).Recently the group acquired 10% share from MAHB for $79 million to consolidate its holding in DIAL. DIAL also has got 230 acres of land for monetization for developing DIAL out of which the company has already Monetized 45 acres for an average consideration of Rs 88 Crore per acre in 2008-2009. DIAL has started the process to monetize the remaining land bank in the coming years.

GMR Energy Limited, subsidiary of GMR Infra has 15 Power generation assets of which 8 are operational and 7 are under various stages of development. The Power segment develops and operates power plants. The company is a major contributor to the Indian power sector through various projects across various fuel types (hydro, solar, thermal and natural gas). It has approximately 5,454 MW of generation capacity including 2,486 MW operational and 2,968 MW under construction. With the Fuel linkages issued being sorted out with the auction of coal mines, revenues from power would rise in two years. However the Focus of the group in the last 3 years has been to reduce debt and build quality assets and it has been the only infrastructure company to reduce its debt by Rs 11000 crore in the last 24months. Similarly the company would utilize the money for bringing the debt down at corporate level from Rs 7000 crore to Rs 3500 crore in the next 2 years. In the recent past quality IPO’s with good management pedigree like Sharda Cropchem. & Inox Winds with reasonable pricing have garnered significant investor interest and have been oversubscribed showing interest for quality paper.

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About Author

DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at own risk. Investors should bear in mind that any investment in stock markets are subject to unpredictable market related risks. Above information is based on RHP and other documents available as of date coupled with market perception. Author has no plans to invest in this offer.

(SEBI registered Research Analyst-Mumbai).


About Dilip Davda

Dilip Davda, a freelance journalist

Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.

Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.

Email: dilip_davda@rediffmail.com


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