GVK Power & Infrastructure plans to list its airport vertical business. The diversified Hyderabad-based infrastructure company is in the process of preparing the documentation and has appointed consultants and bankers to facilitate the filing of the draft prospectus with the regulators within a month. They are looking at bringing down debt by about ₹3,000 crore.
₹24,000-cr debt commitment Faced with a consolidated debt commitment of over ₹24,000 crore on its books, the company has been seeking to bring down its debt at the holding company level by roping in a strategic partner, equity infusion and even a qualified institutional placement (QIP) offer.
While it has been in talks with some of the private equity players, the equity infusion has so far not materialised due to various extraneous factors.
Meanwhile, the airport vertical, which operates and manages Mumbai International Airport Ltd and Bangalore International Airport, and working on modernisation of Bali airport in Indonesia, has also been feeling the burden of the debt.
Impacting performance It had borrowed to increase the stake in both the Indian airports.
While the airports business has steadily boosted the revenues, the debt is impacting its performance.
Mumbai International recorded revenue of ₹601.86 crore for the quarter ended December 31, 2014 as against that of ₹547.39 crore for the corresponding quarter of the previous year. It reported a loss of ₹34.91 crore as against profit of ₹91.51 crore in the corresponding quarter of the previous year. Bangalore International Airport recorded revenue of ₹242.72 crore (₹162.10 crore) and profit of ₹10.01 crore (₹46.59 crore) during the same period.
According to GVK, the interest cost on the borrowings for the acquisition of stake in Mumbai and Bangalore airports has impacted the company’s consolidated profit. GVKPIL’s consolidated net loss widened to ₹209.12 crore for the quarter ended December 2014 as against a net loss of ₹45.43 crore in the corresponding quarter of the previous year.
With airports showing growth, the company sees this as an opportune time for IPO.