GR Infraprojects IPO: Plans to Raise Rs. 1,200 Cr via InvIT IPO

Civil construction project developer GR Infraprojects Ltd. is in talks to house a few of its operating road assets under an InvIT (Infrastructure Investment Trust). The company wishes to go ahead with a public listing of this InvIT and raise around Rs. 1,200 crores, as per sources.

Read along to find out more about this!

A Closer Look into the Situation

In terms of InvIT IPOs, this public issue is going to be the first one since 2017. In 2017, IRB Infrastructure Ltd. launched the first-ever initial public offering of a road InvIT, which was followed by Sterlite Grid’s power transmission assets IPO.

Even though InvITs have gained much popularity since 2017, most investors and companies set them up privately.

InvITs manage infrastructure assets that generate income. These investment trusts primarily offer investors a regular yield. In addition, they also provide investors with a liquid method of investment in infrastructure and construction projects.

As per sources, GR Infraprojects Ltd. has decided to appoint lawyers and investment banks. The company is in talks with them regarding a public InvIT structure, which will house a few of their hybrid annuity model (HAM) road assets in operation.

According to these sources, GR Infraprojects Ltd. had 7 operating road assets as of June 2021.

Investors from around the globe have shown a significant amount of interest in the road projects of this nation. So, a high amount of global capital from these investors seeking higher returns is ready to be invested in the infrastructure projects of India. Furthermore, roads are among the few sectors in this country with a linkage to inflation. So, there is protection against inflation to a certain degree, unlike other sectors like power.

Know More About the Company – GR Infraprojects

GR Infraprojects Ltd. is an Indian road engineering company that excels in infrastructure development, infrastructure design and construction activities. This company mainly works on civil construction projects under BOT (Build Operate Transfer) and EPC (Engineering, Procurement, and Construction) basis in the nation’s road sector. However, its portfolio is not restricted to only these. GR Infraprojects Ltd. also manufactures electric poles, thermoplastic road-making paints, road signages, and metal crash barriers.

As of April 2021, this company completed more than 100 road construction projects. GR Infraprojects Ltd. also has three manufacturing facilities at Guwahati in Assam, Udaipur in Rajasthan, and Sandila in Uttar Pradesh. This company also owns a fabrication and galvanisation unit in Ahmedabad, Gujarat.

Bottom Line

The afore-mentioned inflation link will play a key factor in GR Infraprojects Ltd.’s plans for its InvIT’sinitial share sale. This is due to the fact that a significant portion of the income from HAM road projects is via interest on the future annuity payments this company will receive. The rate of interest rate is linked to the average marginal cost of funds based lending rate (MCLR) of the top 5 scheduled commercial banks, with an addition of 1.25%.

If there is a rise in inflation, it will result in a hike in rates of interest put forward by the central bank. Similarly, interest payments will also rise, protecting the returns.

However, GR Infraprojects Ltd. has not yet officially announced anything on this matter.

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Frequently Asked Questions

1. What is the market capitalization of GR Infraprojects Ltd.?

As of writing, the market capitalization of GR Infraprojects Ltd. is Rs. 17,640 crores.

2. What is the price of each share of GR Infraprojects Ltd.?

The price of each share of GR Infraprojects Ltd. as of writing is Rs. 1,824.80 on the National Stock Exchange. At the same time, the shares of this company were trading at Rs. 1,813.90 apiece on the Bombay Stock Exchange.

3. When was GR Infraprojects Ltd. founded?

GR Infraprojects Ltd. was founded in 1995.

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