Infra companies to raise $5 billion this year through share sales
After Narendra Modi was elected as the prime minister the industries are expecting a growth in GDP (Gross Domestic Product) and the share market has shown a positive trend. Several private Indian firms want to pay off debts by raising up to $5 billion this year through share sales, and the real estate companies are trying to convince the government to give a go ahead to REITs (Real Estate Investment Trust).
Firms such as GVK Power & Infrastructure Ltd, Adani Enterprises Ltd and others in capital intensive industries such as infrastructure, metals and telecommunications are thinking about taking this route to raise money. These companies borrowed heavily in the past few years, when India’s economy was one of the fastest growing in the world, however faced a set back during the economic downturn when the rupee fell beyond expectations.
Jaiprakash Associates Ltd and GMR Infrastructure Ltd, two of the most indebted mid-sized Indian companies, on Thursday raised $250 million each by selling shares. The companies will use the funds to repay some debt and put the stalled projects back on track to recover the losses. The bankers involved in these deals talked about these movements, and are hoping that this move will put the debt laden companies back on track.
The Thomson Reuters data speculated that the average revenue of 24 companies in the infrastructure sub-index, which includes highly indebted firms like Reliance Communications and Jaiprakash, should raise 10.3 % in this fiscal year to March from 8 % last year to make their situations better.
Source – The Financial Express
Adani Enterprises, GVK Power and Infrastructure, Jaiprakash Associates Ltd and GMR Infrastructure Ltd, Q4 net loss of GVK Power, Real Estate Investment Trusts
