Infrastructure giant GMR group is considering listing its global holding company on the London Stock Exchange as a step towards building a $10 billion global assets portfolio.
To this end, the group is consolidating its global assets under GMR Infrastructure International (registered in the Isle of Man) for a public issue in London, according to an executive who did not wish to be identified, in a move that largely replicates what metals behemoth Vedanta did six years ago.
The group's overseas assets include a 50 per cent stake in Netherlands-based power generator InterGen, 40 per cent in Istanbul airport, an 800 Mw power plant under construction in Singapore, 38.5 per cent in South Africa-based coal miner Homeland Energy and a coal mine in Indonesia.
Other company sources added that the value of the overseas assets will surge to about $8 billion by 2014. A recent group presentation set an asset target of $10 billion in five years and the group aims to become a global top 10 brand in key sectors.
"We are also scouting for coal, power and airport assets that will enhance our global portfolio," these sources said, adding that the listing would help the group generate money from the international market "where infrastructure assets are valued higher".
GMR had acquired its 50 per cent stake in InterGen for $1.1 billion last year through the global holding company. The Singapore and South Africa assets will be transferred to the Isle of Man-based firm in the near future before listing on LSE, said the executive.
In 2003, billionaire Anil Agarwal-led Vedanta Resources listed on the LSE after it raised over $1 billion through its public issue. The response was to the tune of $3 billion three times Vedanta's target. Though listed on LSE, most of Vedanta's assets are based in India under subsidiary firms Sterlite Industries, Balco, Malco and Hindustan Zinc.
GMR has three listed entities in India, such as GMR Ferro Alloys & Industries, GMR Industries and the flagship GMR Infrastructure. The group is the developer and operator of two international airports in India--Hyderabad and Delhi. It is also developing six highway projects covering 424 km.
The group, which is also looking to list its power subsidiary GMR Energy on the Indian bourses, requires almost Rs 14,000 crore for its power, road and special economic zone projects. The company is constructing power plants of 4,000 Mw generation capacity in India, of which 2,000 Mw would require immediate funding of Rs 9,000 crore soon. The two road projects require Rs 3,000 crore, while the Krishnagiri SEZ will cost Rs 2,000 crore, said company sources.
GMR Infrastructure recently withdrew plans to raise Rs 2,500 crore through a qualified institutional placement issue owing to unfavourable market conditions. The company has decided to wait five to six months before raising funds from the equity markets, said sources.