Pipavav Port plans IPO to raise Rs500 cr

Pipavav Port plans IPO to raise Rs500 cr

Bangalore: Private port operator Gujarat Pipavav Port Ltd (GPPL) plans to raise at least Rs500 crore through an initial public offering (IPO), according to two bankers briefed on the matter.

The share sale is planned for 2010, the bank officials said on condition of anonymity.

The firm had in October 2008 filed a draft prospectus with the capital market regulator for a proposed public offering of shares, which was withdrawn in March citing poor market conditions.

A GPPL spokesperson declined to comment on the IPO.

The Adani Group-operated Mundra Port and Special Economic Zone Ltd, which runs India’s biggest private port in Gujarat, raised Rs1,770 crore through an IPO in November 2007, the only Indian port operator to have done so.

APM Terminals Management BV, the world’s third biggest container port operator, owns 54.8% in GPPL, which has rights to develop and operate the port for 30 years that began in September 1998. APM Terminals acquired control of Pipavav Port from the original promoter, SKIL Infrastructure Ltd, in April 2005.

The GPPL board is of the view that an IPO is the “most feasible route" to raise funds for expanding Pipavav Port.

A formal announcement on the planned IPO is expected in the next few days, one of the bankers said.

Fund-raising options such as a rights issue or a bank loan didn’t find favour, the bankers said.

The other shareholders of the company include New York Life International India Fund (Mauritius) Llc, IDFC Infrastructure Fund, IL&FS Trust Co. Ltd, Jacob Ballas Capital India Pvt. Ltd, Axis Bank Ltd, IDBI Bank Ltd and India Infrastructure Fund.

The Pipavav port expansion plans involve creating facilities and purchasing equipment to handle around 1.3 million standard cargo containers from the existing 500,000 containers as well as approximately 6 million tonnes (mt) of bulk cargo per year.

GPPL plans to set up a dedicated coal terminal, a coal conveyor belt and a new coal handling system designed to handle 20 mt of coal by 2016.

The port currently handles bulk, containerized and liquefied petroleum gas cargo.

“India needs more capacity to decongest existing ports," said Shailesh Garg, a general manager at the Indian unit of London-based maritime consultancy firm Drewry Shipping Consultants Ltd.

Since APM Terminals took over operations at Pipavav Port in 2005, the company has invested in excess of Rs1,100 crore in port infrastructure, including a major project to deepen the depth to 14.5m to allow bigger ships to call for loading and unloading cargo.