Though no details of the offer are publicly available yet, various reports suggest, the company may raise between Rs 1,700 crore and Rs 1,800 crore through the issue, depending on the price.
The company is planning to utilise the IPO proceeds for meeting its equity commitment and for debt reduction. Post SEBI's approval, GMR can complete the issue within a year, Edelweiss noted in a flash note.
GEL has 4.8 GW of capacity spread across coal, gas and hydro power based assets. Of this, while about 2. 5GW is currently operational, balance 2.3 GW is under construction.
The IPO proceeds will be primarily utilised towards Rs 700 crore equity infusion in Kamalanga and Chhattisgarh power projects and for repayment of debt; in addition, it will provide an exit route to existing private equity investors, Edelweiss said.
GMR had raised Rs 1,400 crore in 2010 in GEL through a PE consortium comprising IDFC and Temasek, among others. These investors were to be provided an exit within three years through an IPO of GEL. Recently, GMR had renegotiated the deal by allotting Rs 1,134 crore worth of compulsorily convertible preference shares in the listed company and an equivalent worth of shares in GEL.
The domestic brokerage has termed GELs fund raising as positive since it will set a valuation benchmark for the energy assets and also relieve balance sheet pressures.
Shares of GMR Infrastructure Ltd opened in green with a gain of almost 5.8% at Rs 22.90 and was trading at Rs 21.75, at around 1400 hours, on BSE, on Monday.