Institutional Equities - Online Share Trading
Institutional Equities - Online Share Trading
Institutional Equities - Online Share Trading
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<strong>Institutional</strong> <strong>Equities</strong><br />
Favorable outcome expected for ADF (Airport Development Fee)<br />
Based on our interaction with the company’s management on this issue, we believe the regulator has<br />
recognised the ADF requirement for project viability and may allow continuation of ADF for remaining amount<br />
out of Rs18.3bn. Apart from that, the enhanced capital cost Rs127.6bn (as against Rs128.6bn spent) has<br />
been approved for Delhi International Airport (DIAL) and we expect ADF approval for an incremental Rs17bn<br />
to bridge the funding gap in coming months. The tenure of the ADF levy has been worked out as 51 and 62<br />
months, respectively, as against earlier approved of 36 months from March 2009.<br />
Exhibit 12: Funding plan for DIAL<br />
Source<br />
Value (Rsbn)<br />
Equity 25.0<br />
Rupee term loan 36.5<br />
External commercial borrowing 16.2<br />
Interest-free lease/trade deposits 14.7<br />
ADF -Approved earlier by MOCA 18.3 Collected Rs11bn until March 2011 (i.e. In 25 months).Temporarily suspended<br />
ADF-Additional 17.0<br />
Project cost approved 127.6<br />
Cost disallowed 1<br />
Total project cost 128.6<br />
Source: AERA, Company, Nirmal Bang <strong>Institutional</strong> <strong>Equities</strong> Research<br />
Adequately funds for projects under construction<br />
The company has raised Rs 13.6bn through preference shares in power subsidiary and Rs 14.7bn<br />
compulsorily convertible preference shares (CCPS) in the airports vertical which would be used for general<br />
corporate purpose. Apart from that the company has got the released equity capital of Rs 9.58bn by<br />
divestment of equity stake in Intergen. We believe this is sufficient for near-term equity commitments of around<br />
Rs25bn for the project pipeline over FY12-13. The investments in the energy vertical would be used to fund<br />
the expansion plans of projects like: (a) Brownfield expansion at Vemagiri to 768MW, (b) 1,400MW power<br />
plant at Kamalanga in Orissa, (c) 600MW Emco plant in Maharashtra, and (d) 1,370MW power plant in<br />
Chhattisgarh. In the airports vertical, the company already has three operating airports and only one is under<br />
construction (Male airport), which will be funded through internal accruals.<br />
Exhibit 13: Fund raising through convertible instruments<br />
GMR Energy -Holding company<br />
Date Security issued Amount (Rsmn)<br />
9 April 2010 Compulsorily convertible into equity shares 9,000 Tamesak holdings,<br />
3 June 2010 Convertible instrument 4,650 IDFC, Argonaut Ventures and Ascent<br />
GMR Airport holdings(Holding company of airport assets)<br />
31 March 2011 Compulsorily convertible preference shares 8,932<br />
Macquarie SBI Infrastructure investments Standard Chartered private equity,<br />
JM financial-old lane india corporate<br />
6 July 2011 Compulsorily convertible preference shares 5,846 -<br />
Source: Company, Nirmal Bang <strong>Institutional</strong> <strong>Equities</strong> Research<br />
61 GMR Infrastructure
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