Mumbai: Gammon Infrastructure Projects Ltd plans to raise about $100 million through a share sale, once market sentiment improves, to bolster its net worth for larger projects, a top official said on Friday.
The company, which holds rights to build and operate 14 projects in road, power and port sectors, does not need additional funds for its existing ventures in the near future as it holds cash balances of about Rs1.5 billion.
“If the market sentiments improve we wouldn’t wait to strengthen our balance sheets further,” managing director Parvez Umrigar said.
Shares in the company jumped by their maximum daily limit of 5% on Friday, after it reported profit rose 95% to Rs136.2 million in 2008-09.
By roughly doubling the company’s net worth, Gammon Infrastructure would be able to gear itself for a larger infrastructure push.
“For the sheer opportunity we see, as well as for gearing yourself up for better market times, we would look at doubling the net worth,” Umrigar said.
The preferred route of equity dilution has not been selected yet, but a preferential placement or a qualified institutional placement could be considered, Umrigar said.
The share sale would further bring down the stake of parent Gammon India Ltd, he said.
According to the BSE, Gammon India directly held 70% in Gammon Infrastructure as of March end.
Indian equities are showing signs of revival, with developers Unitech and Indiabulls Real Estate raising funds via qualified institutional placements in the past month.
Adani Enterprises has also announced raising funds through this route while Housing Development & Infrastructure Ltd is considering it as an option.