GMR Infrastructure: High profile, long-term bet

02 August 2006

The GMR IPO offers a very good opportunity for investors who desire an exposure to the booming infrastructure sector. But the steep pricing leaves very little scope for short- to medium-term investors and only very long-term investors ought to consider the IPO. By Rex Mathew.

After a forced delay because of market weakness, GMR Infrastructure has finally launched its IPO. This is one of the larger issues to hit the markets in recent times and has attracted a lot of investor attention, especially after its pre-IPO placement to high profile private equity investors at high valuations.

GMR Infrastructure is promoted by the Hyderabad-based GMR group, one of the pioneers in the infrastructure sector. The company has a diverse business portfolio focussed on the infrastructure sector, with large projects in airports, roads and power generation.

A consortium led by the company has taken over the Delhi airport for further development and expansion in one of the most controversial public-private partnership initiatives in recent years. Another consortium led by GMR Infrastructure is currently building a greenfield airport in Hyderabad.

The company is raising resources to part-finance various projects in hand besides repayment of existing unsecured loans. The issue would raise slightly over Rs800 crore at the lower end of the price band and Rs953 crore at the upper end.