Gujarat Port IPO sails to oversubscription

The initial public offer for the Indian port developer and operator based in Gujarat, west India, was subscribed over 20 times on the final day of bidding. A spokeswoman said the developer had managed to raise more than its initial $107m target.

The initial public offer (IPO) of Gujarat Pipavav Port (GPPL), an Indian private port developer and operator, was subscribed over 20 times on August 26, the final day of bidding, a spokeswoman from GPPL told Infrastructure Investor.

The spokeswoman said the IPO was able to raise more than the INR5 billion (€83.3 million; $107.2 million) it initially targeted. The targeted amount will go to the company with any amount over the actual INR5 billion to be returned to subscribers, she explained.

Of the INR5 billion raised, INR3 billion will be used for existing debt repayment with the remaining INR2 billion to be used for investments in infrastructure facilities, such as building a warehouse and container yards, according to the spokeswoman.

“The issue was due in December 2008,” the spokeswoman had previously told Infrastructure Investor, “but then the markets crashed and we had to withdraw. That time the entire INR5 billion was to be invested in infrastructure but because of the bad market we borrowed money for investment in infrastructure facilities. And now the IPO money will be used to repay existing loans and invest in other infra projects.”

The price band for the issue was set at INR42 to INR48 per share and the IPO opened on August 23.

However, a day before the opening of the IPO, GPPL had already raised close to $19.6 million by roping in 20 anchor investors, including the government of Singapore and DSP Mutual Fund at a price of INR45 per share, according to media reports.

Other major anchor investors reportedly included HDFC Mutual Fund (MF), Tata MF, Goldman Sachs, Deutsche Securities, JM Financial MF, Axis MF, Credit Suisse Singapore, Canara Robeco MF, Lloyd George Investment, Government Pension Fund Global, International Opportunities Funds – India Equities, P I Opportunity Fund and Amansa Investments.

The Gujarat-based port operator is principally engaged in providing port handling and marine services for container, bulk and liquefied petroleum gas (LPG) cargo and is promoted by APM Terminals, which owns a 57.9 per cent equity interest in the company.

GPPL registered a revenue growth of 31 percent to INR2.19 billion last year and an operating profit growth of 246 percent to INR440 million, according to media reports. But higher interest costs and depreciation led the company to post a net loss of INR1.17 billion last year, a significant increase on the INR676 million net loss it has posted in 2008.