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Thursday, Feb 10, 2005

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IVRCL plans Rs 145-cr public issue

R.Y. Narayanan

Coimbatore , Feb. 9

THE Hyderabad-based IVRCL Infrastructures and Projects Ltd plans to come out with a public issue to raise nearly Rs 145 crore through the book-building route.

The company has filed a draft red herring prospectus with the Securities and Exchange Board of India. The net issue to the public will be for Rs 118.5 crore, reservation for employees Rs 7.5 crore and the greenshoe option will be Rs 18.9 crore, totalling Rs 144.9 crore.

In its prospectus, the company, which came out with an IPO in 1995, has stated that the net proceeds of the issue would be used for investment in BOT/BOOT projects, purchase of capital equipment and repayment of debt/loan.

IVRCL has estimated that the investment in BOT/BOOT projects would need Rs 40 crore, purchase of capital equipment Rs 30 crore, repayment of debt/loan Rs 49.7 crore and issue expenses Rs 6.3 crore. While loan repayment and issue expenses totalling Rs 56 crore would be met from the proceeds of the public issue before March 31, 2005, project investments and purchase of capital equipment would be spread over two years — 2005-06 and 2006-07.

Giving details of the fund requirement, the company, in its draft prospectus, pointed out that the Government had framed policies to channel private investment in infrastructure development projects.

The National Highways Authority of India had recently invited participation in road projects on a BOT/BOOT basis. This will pave the way for private sector investment in the form of capital investment, with freedom to operate and generate revenue.

The Chennai Metropolitan Water Supply and Sewerage Board has floated a tender for a mega desalination plant to supply drinking water to the city. Most construction companies are bidding for such projects, and entry into BOT/BOOT projects will help IVRCL augment pre-qualification.

The IVRCL share closed at Rs 349.50 on the NSE today.

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