KK Mohanty, M-D, Gammon Infrastructure says the funds raised through the QIP will be used to complete the ongoing projects.
We have few ongoing projects where we require additional funds for completion of these projects. Primarily, the QIP funds will be used for that.
KK Mohanty
MD
Gammon Infrastructure
Funds raised via qualified institutional placement (QIP) will mainly be used for completion of some current projects said KK Mohanty, M-D, Gammon Infrastructure . The company's board has approved QIP worth Rs 500 crore.
According to him, with the new government coming into power the dwindling interest in the infrastructure sector seems to have revived, so he expects a positive response for the QIP.
Meanwhile, the company is exploring all options to reduce debt, he Mohanty.
Also read: Recycling of projects high on industry wishlist: Gammon
Below is the transcript of KK Mohanty's interview with Sonia Shenoy & Reema Tendulkar on CNBC-TV18.
Sonia: This fund raising that you plan to do, what would the funds be used for?
A: In the last board meeting we had decided this. We have few ongoing projects where we require additional funds for completion of these projects. Primarily this will be used for completion of those projects, so that it will add more number of operational projects into the basket.
Reema: How soon are you looking to conclude the qualified institutional placement (QIP)?
A: In the last two years infrastructure sector was almost a forgotten sector and infra, especially the public private partnership (PPP) business thecapital requirement is very high to sustain and grow.
However, now with the new government coming in place the market has shown little positive outlook, so we feel there is an appetite in the market, and especially for stocks like ours where it has not saturated. We are on the growth path and also have few projects coming in for completion, so there will be definite interest in our product.
The minimum timeframe required for completion of QIP process is around 45 days. We have just got the board approval and we now need to go through the process of taking the clearances. Therefore, logically after Budget, if the response is good we can go with it.
More to come
Gammon Infra stock price
On June 23, 2014, at 11:09 hrs Gammon Infrastructure Projects was quoting at Rs 14.23, up Rs 0.67, or 4.94 percent. The 52-week high of the share was Rs 16.43 and the 52-week low was Rs 6.05.
The latest book value of the company is Rs 8.56 per share. At current value, the price-to-book value of the company was 1.66.
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