Mumbai: Poor investor response forced infrastructure developer GMR Infrastructure Ltd to abandon on Tuesday a plan to raise $500 million (around Rs2,395 crore) through a qualified institutional placement, or QIP.
GMR first pared the sale to $200 million, including the option to raise $100 million more in case of extra demand, but called off the QIP when the response fell short of its expectations, said investment bankers who didn’t want to be named.
GMR Group’s CFO A. Subba Rao
“We are withdrawing the QIP in light of existing market conditions,” GMR said in a communication to the stock exchanges.
A QIP is the private placement of shares or other securities convertible into stock by listed companies to qualified institutional buyers, such as banks, insurance companies, mutual funds and foreign institutional investors.
GMR had originally aimed to raise $500 million through the QIP, which opened on Monday. The company, however, cut the QIP size on Tuesday following the poor investor response and pressure from investment bankers, the bankers said.
A. Subba Rao, chief financial officer of GMR Group, said the company would look at fund raising at an appropriate time.
“The balance sheet is not under stress. Current projects are well funded. The company was raising money as growth capital, and it does not need capital in the near term, as it has Rs2,000 crore as cash in hand,” Rao said.