Mumbai-based Gammon Infrastructure wishes to buy stakes in international airport projects. The company is already in talks with companies that have won such projects in developing economies. "We expect the first such deal to close in six months," said Managing Director Parvez Umrigar.
The company is looking at Asia and Africa. Gammon is considering infrastructure projects in the initial stages of development. The company says such projects can be acquired at a comparatively lower valuation. Acquiring those closer to completion would be more expensive and entail fighting off competition from other investors. Besides, the company is also geared to take the construction risk of projects at the early stage.
Gammon Infra is planning to spend Rs 1,000 crore to Rs 4,000 crore in taking stakes in airport projects abroad. It plans to fund the acquisitions through a mix of debt and equity.
"We are a debt-free company and have a good portfolio of annuity projects, from where we have confirmed revenue earnings," said Umrigar. The company has a cash reserve of Rs 100 crore. It is also planning to raise $100 million (Rs 455 crore) through a Qualified Institutional Placement (QIP) issue, an enabling resolution for which was taken by the company board last year.
The funds raised from this QIP will be exclusively for new projects. The company, however, is yet to decide the timing, as it is not comfortable with the current market valuation. The stock of Gammon Infrastructure has been hovering around Rs 25.
Earlier, the Bangalore-based GMR group had won and constructed an airport project in Turkey, in a consortium. Gammon, too, plans to bid for modernisation and development of international airports after partnering with local companies.
In addition to its international ventures, Gammon Infra, which is yet to win a domestic airport project, is also keeping its eyes open for such opportunities within the country.
