Saturday, April 04, 2015

GMR Infrastructure Ltd: Rights Issue
GMR INFRASTRUCTURE LIMITED informed about Rights Issue of Equity Shares, the details of which are given below:

  • Ex-Date: 11-03-2015
  • Record Date: 12-03-2015
  • Ratio: 3:14 @ Rs.15/- per share
  • Last Date of Application: 07-04-2015 (before 3:00 P.M)
GMR Infrastructure Ltd in order to raise  Rs.1,400 crore came out with a rights issue, the subscription for which kicked off on 24.03.2015 & will continue till 08.04.2015.  Eligible equity shareholders will get three equity shares for every 14 equity shares held in the company as on March 12, 2015. 

Valuation: The company's trailing 12-month (TTM) EPS was at Rs.0.23 per share as per the quarter ended December 2014. The stock's price-to-earnings (P/E) ratio is 73.24. The latest book value of the company is Rs.16.45 per share. At current value, the price-to-book value of the company is 1.02.

GMR Infrastructure’s consolidated debt as on March 31, 2014 was Rs.45,000 crore. It will come down as 90% of the rights issue proceeds will be used to repay debt.

The promoters have already secured funds to subscribe to their share of the rights issue. With the capex phase behind and the last large power project (1.4 Gw Chhattisgarh power plant) to be operational shortly, GMR’s cash flow is set to improve in the coming days.

Over the past few years, GMR has been focusing on strengthening its balance sheet. It began with hiving off assets and it is now infusing equity.

According to analysts, such de-leveraging will bolster operational improvement through commissioning of under-construction projects.

In the past 18 months, through strategic divestment, the company has released equity worth Rs.3,834 crore and reduced its liabilities by Rs.6,180 crore. The company’s capex is now close to end and its assets have now moved from construction to operational phase.

There were also recent media reports that GMR Infrastructure plans to raise Rs.4,000 crore over the next one year through divestment of assets and share sale to reduce debt and ease cash flow.

The loss-making infrastructure company plans to divest projects, monetise land assets and sell stake at holding company level to raise funds. It has put a freeze on capital expenditure for the next 2-3 years

The lead bankers for the rights issue are JM Financial, Axis Capital Holdings, ICICI Securities and SBI Capital Markets.
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