Gammon Infrastructure Projects (GIPL), an infrastructure project development company promoted by the 85-year old Gammon Group, is entering the capital market with its initial public offering (IPO) of 1,65,50,000 equity shares of face value Rs 10 each for a cash price to be determined through a 100% book building process. The issue will open on March 10, 2008, and will close on March 13, 2008. The price band has been fixed between Rs 167 and Rs 200 per equity share.
The issue has been graded by Credit Analysis & Research Limited as CARE IPO Grade 4 (Grade Four) indicating above average fundamentals.
The issue comprises a net issue of 1,48,95,000 equity shares to the public and a reservation of 16,55,000 equity shares for eligible employees. The issue and the net issue will constitute 11.45% and 10.30% respectively of the post-Issue paid up equity share capital of the company.
At least 60% of the net issue will be allocated on a proportionate basis to qualified institutional buyers. Further, 5% of the QIB portion will be available for allocation to mutual funds only and the remaining QIB portion will be available for allocation to the QIB bidders including mutual funds. At least 10% of the net issue will be available for allocation on a proportionate basis to non-institutional bidders and at least 30% of the Net Issue will be available for allocation on a proportionate basis to retail investors.
Investors can avail of two modes of payment. Under Payment Method-1, the amount payable on submission of the bid-cum-application form (in case of retail individual bidders and non-institutional bidders) is Rs 50 per equity share (such that it shall not be less than 25% of the issue price). And the balance payable shall be paid by the due date. Non-resident bidders cannot make use of Payment Method-1. Under Payment Method-II, the amount payable on submission of the bid-cum-application form in the case of retail individual bidders and non-institutional bidders shall be 100% of the bid amount, and, in the case QIBs, will be 10% of the bid amount with the balance being payable on allocation.
GIPL was incorporated in 2001 and is modelled as an infrastructure development company undertaking projects on a public-private partnership basis (PPP). Presently, GIPL undertakes and develops projects such as roads, bridges, ports, hydroelectric power and biomass power projects on a PPP basis.
Presently, GIPL’s infrastructure project development business includes fourteen projects, of which four are already in the operations phase, seven are in the development phase and three are in the pre-development phase. GIPL also provides O&M and project advisory services for projects which are being undertaken by the project specific companies.
The Issue proceeds will be utilised to:
* Contribute to a part of the investment required by KBICL, its subsidiary formed for the design, construction, finance & maintenance of a 1.8 kilometer long four-lane bridge across river Kosi including 8.2 kilometers long approach roads and Guide bund & Afflux bund on NH-57 in the Supaul district of Bihar;
* For the investment required by GICL, its subsidiary formed for the design, construction, finance & maintenance of a 32 kilometer long four-lane bypass to Gorakhpur town on NH-28 in the state of Uttar Pradesh;
* For the investment required by SHPVL, its subsidiary formed for developing the Rangit-II hydroelectric power project in the state of Sikkim;
* For infusion of funds into MNEL, its subsidiary formed for the four-laning of the 99.5 kilometers Vadape-Gonde section (between Mumbai and Nasik) of NH 3 on BOT basis;
* Repayment of loan to Gammon India Limited and general corporate purposes and investment in strategic initiatives and acquisitions.
The book running lead managers to the issue are IDFC-SSKI Private Limited and Macquarie Capital Advisers (India) Private Limited . The co-book running lead manager to the issue is Collins Stewart Inga Private Limited.