The year 2010 is will witness some of the private ports in India raising capital by selling shares through initial public offering.
The year 2010 is will witness some of the private ports in India raising capital by selling shares through initial public offering. The ports that have so far decided to go through this route in 2010 include Gujarat Pipavav Port and MARG Karaikal Port. Gujarat Pipavav Port is planning to raise Rs 5 billion through an initial public offering (IPO). The company filed a draft prospectus with the Securities and Exchange Board of India (SEBI) in October 2008, for a proposed public offering of shares, which was withdrawn in March 2009 citing poor market conditions.
APM Terminals Management BV owns 54.8 per cent in GPPL. It acquired control of Pipavav port from the original promoter ? SKIL Infrastructure Limited ? in April 2005. The other shareholders of the company include New York Life International India Fund (Mauritius) LLC, IDFC Infrastructure Fund, IL&FS Trust Company Limited, Jacob Ballas Capital India Private Limited, Axis Bank Limited, IDBI Bank Limited and India Infrastructure Fund.
MARG Karaikal port is a wholly-owned subsidiary of Chennai-based infrastructure company MARG. Karaikal Port is planning to go for an IPO in the next financial year, 2010-11, to meet its sales and operational requirements. Presently, the Karaikal port is valued at Rs 8 billion, which is more than its parent, Marg"s market capitalisation of Rs 5.27 billion.
Marg recently raised around Rs 8 billion from banks to fund the development of Phase II of the Karaikal port. It would have an equity component of Rs 4.28 billion, while the cost of the development would be around Rs 12 billion. An additional Rs 1 billion would be required for the expansion of breakwaters and around Rs 3 billion of foreign exchange funding for the equipment, which would be purchased through Euro loans. With the additional costs, the development of Phase II is expected to increase to Rs 15 billion.
As part of Phase II development, the company is building three new modernised berths with conveyor belts to help direct offloading of cargo, which will be completed by 2011-12. The sea channel will also be deepened by more than 2.5 m to 16.5 m to make the passage much easier for Panamax size vessels. The cost of dredging and desilting of the channel has been put at Rs 200-250 million annually.