Ahead Of IPO, MPSEZ Lands $120 Mn GIC Deal

MUMBAI: The Adanis-promoted Mundra Port & SEZ (MPSEZ) has raised $120 million from the Government of Singapore Investment Corporation (GIC), T Rowe Price Asia, ICICI Bank and IDFC. This pre-IPO deal will fetch money over and above the $100 million it raised a year ago using optionally convertible bonds from GIC and UK-based private equity firm 3i.

On Wednesday, market regulator Sebi cleared the firm's IPO. A price band of Rs 400-440 has been fixed for the issue, which is expected to open by November first week. MPSEZ would sell 10% of its equity in the market, said informed sources.

They added that 3i has also picked up equity in the unlisted Adani Power (APL), which is also eyeing the primary market. The subsidiary company is currently pursuing two projects — a 2,640-MW plant in Mundra and a 2,000-MW plant in Gundiya district in Maharashtra with total investment of Rs 20,000 crore.

At Rs 440 per share, MPSEZ's market cap will be around Rs 17,500 crore ($4.4 billion). The other equity holders — 3i, GIC, T Rowe, ICICI Bank and IDFC, who cumulatively invested $220 million — will hold around 4-5% in MPSEZ, post-IPO. The remaining stake is being held by the promoter — Gautam Adani and group companies.

On September 17, ET had reported that GIC and 3i had asked MPSEZ promoters to convert their $100 million-worth IPO convertibles into equity. Over the past one year, the company's valuations soared from the earlier $1 billion to over $4 billion now, bringing down their investments to a minuscule 2-3%.

According to equity analysts, the company's valuations shot up after it changed its profile of a pure port company into an umbrella organisation that owns three port projects and a port-based special economic zone (SEZ) that is already in operation.

The Ahmedabad-based Adani group made MPSEZ both operating and holding company for three port projects — Mundra, Dahej and Dholera, and the sprawling SEZ at Mundra. Total capital outlay for all the projects undertaken by MPSEZ had been pegged at around Rs 4,000 crore.

While Mundra and the proposed Dholera ports were wholly owned by Adani, Dahej port is being developed as a JV with Petronet LNG, with the Adani group holding 50% stake. The port at Dahej is a mandatory condition as part of the agreement between Petronet, India's largest LNG importer, and Gujarat government.