Era Infra to raise Rs 600 cr via QIP

Era Infra to raise Rs 600 cr via QIP
The Economic Times, August 12, 2009, Page 5

Paramita Chatterjee & Sanjeev Choudhary NEW DELHI

DELHI-BASED engineering and construction firm Era Infra Engineering is looking to raise Rs 500-600 crore by issuing fresh shares through qualified institutional placement (QIP). The firm has given the mandate to UBS to facilitate the process, two persons familiar with the matter, told ET.

“We have got the shareholders’ approval to raise Rs 1,000 crore through fresh issue of shares. We will raise funds at an opportune time,” said Era Infra CMD HS Bharana, without specifying details of the fund raising plan. Another senior executive of the company and a banker close to the fund raising exercise said the company plans to go in for a QIP in a month. Era Infra scrip closed flat at Rs 151.

The company plans to use the fund to buy equipment, finance three road projects, besides meeting working capital requirements. It also requires Rs 70-80 crore for equipment purchase and another Rs 140-150 crore towards equity for three road projects in Madhya Pradesh, Andhra Pradesh and Haryana being constructed on build operate transfer (BOT) basis.

With rising stock market, many companies have successfully tapped the capital market to raise funds through the QIP route including Unitech, Indiabulls Real Estate, HDIL and Bajaj Hindusthan. Infrastructure firm GMR, however, was an exception and had to withdraw its QIP following poor investor response. Era Infrastructure is a subsidiary of Era Group whose business venture spans across roads, townships, shopping mall, IT parks, hotels and office complexes across India.