Edelweiss Research has maintained 'Buy' on GMR Infrastructure with target price of Rs 39 in its report.

GMR has raised USD 350 million through its recently concluded QIP and 180 million preferential warrant allotment to promoters (one warrant equivalent to one equity share). The pricing was Rs 31.5/share leading to 16.9% dilution (fully diluted capital of 4.45 billion shares). The company will receive 25% of the preferential allotment money now and the balance within the next 18 months. Management proposes to utilise the proceeds to reduce Rs 35 billion corporate debt which is due for repayment within the next 18-24 months.

To reduce corporate debt and pursue growth opportunities, management continues to explore other avenues to raise funds including listing its energy and airport verticals, divesting stake in projects and asset sales over the medium term.

Commenting on the investment rationale, the stock broker said, "We maintain intrinsic value of the company's asset portfolio drives our revised TP of Rs 39 (Rs 40 earlier). We expect signing of PPAs for its Chattisgarh project, partial land monetisation of the Delhi airport land at revised rates, settlement of MALE airport dues and clarity on gas projects could provide further impetus to the stock valuation. Maintain Buy/Sector Outperformer.''

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