GMR Energy to raise Rs 465 cr, via stake sale to IDFC

Infrastructure major, GMR Energy Limited (GEL), has signed a shareholders' agreement with an investor group led by Infrastructure Development Finance Company Limited  (IDFC) to raise funds for its energy sector expansion plans. As per the terms of the agreement, the Chennai-based investment firm will infuse Rs 465 crore, along with its co-investors, Argonaut Ventures and Ascent Capital. The funds from the IDFC Group led investors would support the company's expansion plans. Pertinently, this is the second round of equity fund-raising exercise for GMR as it had alreday raised $200 million from Singapore-based private equity firm, Temasek Holdings and Rs 300 crore from ICICI Bank, through preferential allotment of shares in April this year. 

 GEL has planned to enhance its installed power generation capacity, from the current 808 MW, to around 6,500 MW over the next 3-4 years, necessitating significant capital investments to finance its growth. The company has already achieved financial closure and fuel linkages for 1,050 MW GMR Kamalanga project and 600 MW Emco Energy projects. The company has also proposed expansion to its Kamalanga project to 1,400 MW. The EPC contract for the expansion has been finalised with SEPCO, which is the contractors for 1,050 MW capacity, under execution at the Kamalanga site. Several other projects are also proceeding apace. GMR has 13 power projects, of which three are operational and 10 are at various stages of implementation. 

 GMR also has plans to invest around Rs 10,000 crore to produce 2,000 to 3,000 MW of energy from nuclear sources, over the next five to seven years, with liberalization of the Indian nuclear economy. “We are extremely happy to have IDFC Group, Argonaut and Ascent as the shareholders of GEL. Our relationship with the IDFC Group has been sustained over time and we are confident that this relationship will continue to be a mutually gratifying experience for both parties,” said G M Rao, Chairman of GMR Group commenting on this pact.Established in 1997 with a vision to facilitate the growth of provate participation in infrastructure development in India,IDFC has,so far financed over 200 projects across core infrastructure sector such as power ,roads,telecommunication. IDFC Group has mobilized and committed over $5 billion in debt and $ 1 billion in equity to infrastructure companies and projects in India.