homemarket Newsstocks NewsKotak Institutional Equities upgrades GMR Infra to 'buy' rating with a target price of Rs 45
Kotak Institutional Equities upgrades GMR Infra to 'buy' rating with a target price of Rs 45
GMR Infra is looking to merge the subsidiary GMR Airports Ltd with itself, which is the airport platform unlisted entity. So now GMR Airports Infra becomes the airports listed entity and the group simplification works in a manner in which the shareholding comes to the GMR group at 33.7 percent, the Groupe ADP from France holds around 32.3 percent and the public shareholding, the remainder, is around 34 percent.
Kotak Institutional Equities have a buy rating on GMR Infra with a target of Rs 45. The brokerage firm believes that GMR has now delivered on its promise of simplifying the group structure and Groupe ADP will be bringing in close to Rs 3,400 crore of investment into the consortium.
So this particular simplification leads to access to lower cost capital, which will lead to significant savings and also improved upstreaming of cashflows.
The street has been witnessing quite a bit of newsflow towards the end of FY23 as far as the company is concerned. Significant fundraising as well as group simplification is something that is aiding or unlocking value according to Kotak Institutional Equities.
The company recently raised close to Rs 2,900 crore via the foreign currency convertible bonds (FCCB) route and the conversion price for this particular fundraise was at Rs 43.67 per share.
Along with that, the company also said that it is looking to merge the subsidiary GMR Airports Ltd with itself, which is the airport platform unlisted entity. So now, GMR Airports Infra becomes the airports listed entity and the group simplification works in a manner in which the shareholding comes to the GMR group at 33.7 percent, the Groupe ADP from France holds around 32.3 percent and the public shareholding, the remainder, is around 34 percent.
The firm has retained the value of the existing airports and increased a fair value of the stock on higher value of the new airport wins that the GMR Infra is expected to get.
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