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GMR Infrastructure Ltd on Monday said it has withdrawn plans to list its unit GMR Energy Ltd, within a month of filing a draft red herring prospectus (DRHP) with the capital markets regulator Securities and Exchange Board of India (Sebi).The company will “hit the capital market at an appropriate time”, a GMR Group executive said, requesting anonymity. It had filed the draft prospectus on 28 March.

A spokesperson for the GMR Group declined to disclose details of the proposed relaunch of the IPO. “Our decision to withdraw the DRHP is due to business reasons.”The money raised from the IPO was to be used to fund equity contribution in two power projects in Odisha and Chhattisgarh and repay debt.

GMR Infrastructure had hired Bank of America Merrill Lynch to assist with the listing process, which would have helped private equity firms such as IDFC Alternatives Ltd to at least partly offload their investments in GMR Energy.

In February, the GMR Group, Singapore’s state-owned investment firm Temasek Holdings Pte Ltd and a consortium of investors led by IDFC Alternatives agreed to restructure their investments in GMR Energy. GMR Infrastructure, the flagship company of the group, was to issue compulsorily convertible preference (CCP) shares worth INR 788.8 crore and INR 347.8 crore to Temasek and the IDFC-led group, respectively, through a preferential allotment.These investors had put in a combined INR 1,395 crore in CCPs in GMR Energy in 2010.

GMR Energy has about a dozen companies under its fold, including GMR Power Corp. Pvt. Ltd, GMR Vemagiri Power Generation Ltd, GMR EMCO Energy Ltd and GMR Kamalanga Energy Ltd. The announcement came after market hours. Before that, the shares of GMR Infrastructure rose about 2.5 Percent to INR 26.35; the benchmark Sensex fell 0.25 Percent to end at 22,631.61 points. The GMR Group has tried its best to generate some interest for the IPO but failed to do so, said an analyst with a domestic brokerage.

“The power sector had witnessed some interesting deals. But most of them were at plant levels, not at company levels,” he said, requesting anonymity. “One of the reasons for withdrawing this IPO could be that GMR Infrastructure must have managed to get a new private equity player giving an exit to some of the existing investors.”

In March, a consortium led by Abu Dhabi National Energy Co. PJSC had agreed to buy two hydropower plants from the debt-laden Jaypee Group by investing INR 10,320 crore, the latest instance of a local firm selling assets to cope with an economic slowdown.

JPMorgan Asset Management invested $150 million (around INR 910 crore today) in the Bhaskar Group’s Diligent Power Pvt. Ltd in May last year. French energy company GDF Suez SA will acquire a 74 Percent stake in a 1,000-megawatt coal-fired power project owned by Meenakshi Energy and Infrastructure Holdings Pvt. Ltd in Andhra Pradesh.

Source-On Request