Why GMR Infra is keen to sell shares in airport biz

Moneycontrol Bureau

GMR Infrastructure  is likely to sell shares in a public offer for its airport division. The firm that runs Delhi and Hyderabad airports along with an international airport in Istanbul, has debt of around Rs 4,000 crore in the vertical.

The company is looking at raising around Rs 2,000 crore to boost expansion and help a clutch of private equity investors to sell shares in the company, says an Economic Times report quoting sources. The firm is working out size and other details related to the potential IPO.

The report further says that the listing is mainly to help investors exit as the company does not have immediate fund requirement. Private equity firms together own around 21 percent stake in the company.

Laden with over Rs 30,000 crore debt, GMR  has adopted asset-light asset- right’ strategy by which it will offload stake in its power, road and airport projects and re-deploy proceed from stake sale in new projects. This approach will also help it clean balance sheet

Last month, the company sold 70 percent stake in an energy venture in Singapore and this helped the company reduce debt by over Rs 2,000 crore.

Even GMR’s competitor, GVK Power and Infra has in recent past said that it will sell stake in business division to ease liquidity pressures. The firm has a debt of around Rs 16,000 crore with an over Rs 500 crore annual interest outgo.

Considering the fact that the GMR and GVK, both have undertaken big ticket and long gestation projects in all their business verticals, such debt levels is not abnormal, say analysts. GVK is also looking to offlad stake in airport vertical at an appropriate time.

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