GMR Infrastructure, which has been rationalising its asset portfolio over the past year with the aim of reducing its debt burden, says it is entering a phase where the focus will be on generating revenue as operations of new projects stabilise. Madhu Terdal, Chief Financial Officer of GMR Group, tells FE’s Anand J & Ajay Sukumaran that over the next two years, the company will look at raising equity while reducing debt level. Edited excerpts:

Apart from the Philippines, you have not taken up new projects. How do you see your investment cycle now?

We want to operationalise the projects in the existing cycle. Only the capex cycle is over. We are not actively pursuing other opportunities as we still have to stabilise our operations and profitability. We have gone beyond a state of instability. We have sufficient investment pipeline as the gas power plants of 1,400 megawatt are still to operationalise. Let the full 3,000 MW of coal fired power plants generate cash.

The 2,000 MW of hydro power plants work will start now. This is the next investment cycle with Rs 15,000 crore expected to be invested over 6-7 years. If projects come, we will take a look at it and will be selective. There might be a few airport or road projects coming up and we will see.

With the new government in place, what are your expectations?

Infrastructure has gone through a bad phase over the last 3-4 years. Government must work out a separate package for infrastructure. It should be combination of fuel supply agreements and improving the financing mechanism for the infrastructure companies. Because of the stress and increase in project cost, we need to reschedule the repayment of loans. There can be a three-year extra moratorium on repayment as the postponing of the commencement operations date (COD) alone will not help us. Reduction in interest rates should also happen. The infrastructure bond market has collapsed in our country and government has to promote this route to raise money.

They have taken decision on coal and need to expedite it and ensure that adequate quality coal supply is ensured. We expect a resolution on the gas issue vis-a-vis adequate compensation to gas producer and when the tariff comes up.

Will the power sector lead your airport sector from now?

Our revenue from the sector has the potential to go up by Rs 3,000 crore. And if they continue to be utilised even up to 60-70%, it could be Rs 5,000 crore next fiscal with Chhattisgarh power plant and the gas power plants also getting operationalised.

Now that you have withdrawn the energy IPO plan, will you go for an airport IPO?

The decision on the energy IPO was taken for a strategic reason. Over the next 2-3 months, you will see why we did that.