GMR may exit partially from Nepal

The Indian Group that has been planning to construct Upper Karnali hydropower project may exit some of its assets in Nepal, according to the news reports.

It is assessing valuation of Nepal assets that could be in the range of Rs 1,000 crore Indian Currency (IC), the reports claimed, adding that the GMR has two large projects with 100 per cent stake in Nepal. "The project that they are currently working on is Upper Karnali hydropower project that the GMR Energy and GMR Infrastructure are co-developing and co-owning the hydel project. They have around 70 per cent to 80 per cent stake in the project.

But the reports claimed that GMR has started talks with buyers like Morgan Stanley.

The valuation is fairly substantial because the amount that they had put in into the hydropower project was roughly around Rs 4500 crore IC to Rs 5000 crore IC and they are looking at least Rs 1,000 crore IC.

GMR will need to – at some point need – probably to temper its price down and bring it to around Rs 8,00 crore IC, according to the reports.

The GMR has also been looking at consolidating its road assets, if the reports are to be believed. "So amongst their road assets there is one sell which is likely to happen sometime."

The GMR has been looking at selling the Vijayawada and Hyderabad highway project since last eight-nine months, the reports quoted sources adding that Morgan Stanley Infrastructure Fund has emerged as a likely frontrunner to buy that out in valuations roughly around Rs 8,00 crore IC to Rs 9,00 crore IC. The overall debt of GMR currently stands at around Rs 40,000 crore IC.

The partial selling of Nepal assets is expected to bring them an interest saving of roughly around Rs 1,00 crore IC, if they get the valuation that they are looking at. "Even the road assets as a whole should bring in some amount of interest saving as well," the reports in Indian media projected.