GVK Power seeks to raise Rs2,500 crore

GVK Power seeks to raise Rs2,500 crore
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First Published: Wed, Jun 03 2009. 09 57 PM IST
Updated: Wed, Jun 03 2009. 09 57 PM IST
Hyderabad: On Wednesday, GVK Power and Infrastructure Ltd said it plans to raise about Rs2,500 crore by selling equity to institutional buyers and use the funds to invest in its subsidiaries.
The firm operates in infrastructure segments such as power, airports, seaports, roads, coal mining, oil and gas, urban infrastructure and special economic zones through its subsidiaries.
“The board on Wednesday approved a resolution to raise some Rs2,500 crore, with a green shoe option of Rs500 crore, through placing equity with qualified institutional investors,” chief financial officer Issac A. George said. “We plan to complete the equity placement in the next six weeks.”
The size of the equity dilution will depend on the offer price, he said. “For example, the equity dilution would be some 25% at an offer price of Rs50 a share, and some 22% at an offer price of Rs60.”
The board also approved issuing and allotting warrants or other securities convertible into 300 million shares to its promoters and promoter groups, the company said in a statement to the Bombay Stock Exchange (BSE).
Several other development and infrastructure firms such as Indiabulls Real Estate Ltd, Unitech Ltd, GMR Infrastructure Ltd, Housing Development Infrastructure Ltd and Puravankara Projects Ltd have also lined up to raise funds through qualified institutional placements, or QIPs, in which promoters sell shares to institutional buyers without involving retail investors.
GVK Power, which went public through an initial public offering in January 2006 raising Rs256.54 crore, raised another $300 million (Rs1,404 crore) in 2007-08 through QIPs. Money raised from the latest QIP will not be used to retire debt, George said, adding that GVK Power currently has at least Rs20,000 crore of orders and is close to finalizing the funds to execute them.
George said the Rs2,500 crore raised from the QIP would go into seven subsidiaries, including GVK Power (Goindwal Sahib) Ltd, Alaknanda Hydro Power Co. Ltd, Goriganga Hydro Power Pvt. Ltd and GVK Coal (Tokisud) Co. Pvt. Ltd.
Shares of GVK Power, which have more than doubled so far this year, rose 6% on Wednesday to close at Rs47.70 on BSE, while the benchmark Sensex ended nearly flat at 14,870 points.
Reuters contributed to this story.
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First Published: Wed, Jun 03 2009. 09 57 PM IST
More Topics: GVK Power | Equity | Indiabulls | Real estate | Unitech |