Knowledge Centre

Safe harbor

The case:
Gujarat Pipavav Ports Ltd. (GPPL) operates a multipurpose port at Pipavav, Gujarat with a container and bulk capacity of 6 lakh TEUs per annum and 5 million metric tonnes per annum. IDFC has partnered the company since 2005 and has facilitated the financing of the project both through debt and equity. Currently, IDFC Private Equity is the second largest shareholder with 14.23% stake after investing a total of Rs. 192 crore in the Company through IDFC Infrastructure Fund I & II.

The challenge:
In 2005, GPPL needed finance to develop and expand the port. IDFC stepped in then and provided debt worth Rs. 445 crore towards this project. In FY2010, GPPL, in consultation with IDFC, reassessed the business plan, the revised project cost estimates, and the funding requirement for the project. The reassessed value was pegged at Rs. 1,200 crore. While IDFC underwrote and successfully arranged a debt of Rs. 1,000 crore the remaining amount had to be raised through an IPO. Another challenge was to syndicate the bulk of the Rs. 1,000 crore debt through a lender’s consortium.

IDFC's ‘one firm’ solution:
While IDFC Ltd. underwrote and successfully arranged for the Rs. 1,000 crore debt, IDFC Capital coordinated the debt syndication exercise with IDFC Limited acting as the lead bank amongst 7 banks and finance institutions (FIs) in the lender’s consortium. The legal due-diligence, including common loan documentation for the consortium, was led by IDFC’s legal team.

The IPO process for GPPL is being handled by IDFC Capital and the company plans to raise Rs. 500 crore through the IPO. The smooth coordination between IDFC Capital, IDFC Legal and their parent company, IDFC Ltd., has made GPPL a success story, where its IPO has got a 4/5 rating by CRISIL, which means that this is an above average offering.

How it worked at IDFC

  • IDFC: underwrote and arranged for Rs 1,000 cr debt
  • IDFC Capital: Coordinated the debt syndication exercise and handled the IPO process
  • IDFC Legal: Legal due-diligence, including common loan documentation for the consortium


Click here to Download PDF

See More


    © 2016 IDFC Bank.

    all rights reserved