GMR Infrastructure Ltd. announces completion of investment by Tenaga Nasional Berhad in GMR Energy

GMR Energy Limited (GEL), a subsidiary of GMR Infrastructure Ltd (GIL) announced allotment of 30% stake to Tenaga Nasional Berhad, Malaysia (TNB) for a cash consideration of USD$300 million, implying an Equity value of USD$1 billion (Rs 6,665 Cr approx.). GEL and TNB had announced this strategic partnership in May 2016 and the allotment of shares marks the completion of this landmark transaction in the Power sector. 

Resultant shareholding of GMR Energy:

• GMR Infrastructure and its associates: 52.14%
• Tenaga Nasional Berhad: 30%
• Private Equity investors (Temasek, IDFC, etc): 17.86%

With the rich experience that TNB brings in, GEL would be well poised to pursue avenues for growth in future and create further value for all stakeholders.GEL now has a diversified portfolio of coal based, gas based and renewable (Hydro & Solar) power assets having total capacity of 4,630 MW. The portfolio comprises of operating capacity of 2,300 MW and pipeline capacity of 2,330 MW.

Through this investment, GMR Infrastructure continues to reduce its Corporate debt on an ongoing basis thus strengthening its balance sheet, attract foreign capital (both equity and debt) and demonstrate the strength of its underlying businesses and its attractiveness to various stakeholders.

Commenting on the investment completion, Mr GBS Raju, Chairman, GMR Energy Ltd said:

“We are pleased to welcome on-board Tenaga Nasional Berhad as our strategic partner. This once again re-emphasises GMR’s commitment & ability to successfully execute strategic partnerships to create value for all its stakeholders. This would provide a renewed impetus to our Energy business and result in a stronger balance sheet enabling the company to capitalise on future growth opportunities. Indeed, coming as it does, in the wake of Government reforms, the investment from Tenaga Malaysia heralds the attractiveness of the Indian Energy sector to the foreign investors.”

This Foreign Direct Investment (FDI) from Tenaga Nasional Berhad is the first of its kind in the Indian power sector and represents the underlying strengths of the industry inspite of the headwinds being faced over the last few years. The transaction is also expected to have a cascading effect on the Indian power sector and pave the way for more foreign investments.