Dec. 13 GMR Infrastructure Ltd., the operator of New Delhi airport, rose in Mumbai trading after selling $1 billion of shares to investors including George Soros and Citigroup Inc. to build roads and airports in India.
The shares climbed 3.4 percent to 251.45 rupees as of 10:53 a.m. on the Mumbai stock exchange, the most in two weeks. The stock has more than tripled this year, compared with a 48 percent gain in the benchmark Sensitive Index.
The sale allows the investors to participate in Prime Minister Manmohan Singh's plan to sustain growth in the world's fastest growing major economy after China. The South Asian nation needs as much as $1.6 trillion for infrastructure in the next 10 years, or about 10.5 percent to 12 percent of its GDP, according to the Asian Development Bank.
``We will be able to double our asset base as a result, our market cap will go up,'' said Madhu Terdal, GMR's executive vice president, said in a phone interview in Mumbai today. Bangalore- based GMR plans to increase its assets in three years to 520 billion rupees ($13 billion), he said.
The company, which is building a second airport terminal in Istanbul, sold shares to 49 investors, including Soros, T. Rowe Price Group Inc., Citigroup, ICICI Bank Ltd. and Credit Suisse Group, Terdal said yesterday.
GMR sold 165.2 million shares at 240 rupees each, at a discount to the closing price of 243.2 rupees on the Bombay Stock Exchange yesterday.
The sale accounted for 9.07 percent of the company's equity and will cut the founders' stake to 73.3 percent from 80.7 percent, while pushing up the holding of overseas investors to 13.3 percent.
Expanding Power
GMR plans to use the money from stake sale to expand power capacity by more than fourfold to 3,500 megawatts from 800 megawatts, invest in building a second terminal at Sabiha Gokcen International Airport at Istanbul, Turkey, buy coal mines in Indonesia and South Africa, construct roads locally and overseas and build a special economic zone in the southern Indian state of Tamil Nadu, Terdal said.
GMR plans to spend about 10 billion rupees in building a special economic zone in Tamil Nadu, invest additional 10 billion rupees each to build coal-based and hydro power plants in the country. It also plans to spend a similar amount on building roads locally and overseas.
``We are also examining options of nuclear energy and have formed a core group within the company,'' Terdal said. ``We may seek a foreign partner.''
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