Gammon Infrastructure Projects Ltd (GIPL) which was planning to raise Rs500 crore through qualified institutional placements (QIPs) is now exploring other options like debt, stake sale and private equity funding due to its below expected performance in the stock markets and lower valuation.
"QIP is always governed by the market value. We are not satisfied with the way our shares are performing currently. The market value is far below than what it was for the initial public offer (IPO) last year," said Parvez Umrigar, managing director, GIPL.
Earlier, the company had planned to raise Rs500 crore through a QIP. Besides raising funds through debt or private equity placements, GIPL may also sale its stakes in its 15 special purpose vehicles (SPV).
“We are now probably looking at some debt, as GIPL is currently a debt-free company,” Umrigar said adding that it may talk to private equity funds, which may look beyond the company’s current share price.
However, Umrigar does not rule out QIP as an option completely. "QIP continues to be an option for us, as it is a faster process and not a time-consuming one. Liquidity is faster with QIPs," he said.
Last year, GIPL raised Rs276.40 crore through its IPO but GIPL shares have fallen by 31% since its listing on 3 April 2008. Gammon Infra shares were listed on the BSE at a premium of 8% over its issue price of Rs167. GIPL shares closed 1.2% down at Rs108.5 on the Bombay Stock Exchange, while the Sensex ended 0.2% down at 17,195 points today.
“GIPL entered the capital market when things were not so good, but still our issue was oversubscribed. Since then, the markets have not been stable,” Umrigar added.