Strategic players eye two of GMR's coal-based projects.

Strategic players, as well as global private equity funds, are understood to be keen on acquiring significant stakes in two of GMR Infrastructure's coal-fired projects -- Emco in Maharashtra (generating 600 MW) and Kamalanga in Odisha (1,050 MW).

Investment bankers in the know said strategic players were keen to acquire Emco, in which GMR had made an equity investment of about Rs. 1,000 crore, and the transaction was expected to be closed within two months.

GMR had acquired this asset in 2009. 'The negotiations have been broad-based and the investors are now understood to be keen on the Kamalanga project, too. As we understand, GMR is looking at equity returns of 1.3-1.6 times on the Emco project and if Kamalanga is also included, GMR is expected to settle at 1.4 times its equity investment,' a senior investment banker told Business Standard.

The banker further indicated the final contours of the transaction, in terms of whether GMR wanted to exit fully or offload part of the stakes, were being threaded. He added this would depend on the investors' offer. If the talks fructify, GMR is expected to get Rs. 3,000 crore from these two projects.

The two power projects, commissioned in various stages through the past 12 months, have generated revenue of Rs. 575 crore for the nine months ended December 2013.

BS