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Sadbhav Infra’s proposed remerger leaves investors bitter. Did Nomura, Norwest get a raw deal?

In October 2019, Sadbhav Infra announced its plans to remerge with parent Sadbhav Engineering, owing to rising debt and falling profitability. The deal has sounded the death knell for Sadbhav Infra’s investors, who had believed in the company’s asset-ownership pitch back in 2015, at the time of listing. But for parent Sadbhav Engineering, it’s a blessing.
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priyanka
12 Dec 2019 7 Mins Read 1 comments
Concept by Muhabit ul haq; photo by Getty Images
Concept by Muhabit ul haq; photo by Getty Images
On September 15, 2015, Sadbhav Infrastructure, the asset-ownership business of Sadbhav Engineering, got listed on the stock exchanges at 8% premium to its IPO price of INR103 a share. The listing had a dual purpose – to raise funds to pare project debt and to give an exit to private-equity investors Xander and Norwest. In less than five
Gayatri Highways, which debuted on the exchanges last year after the business was demerged from its EPC-focused parent Gayatri Projects. Gayatri Highways has lost more than 86% of its valuation since listing, while Gammon Infraprojects has seen its market cap decline from INR591 crore in FY14 to INR56.5 crore at the end of FY19. ( Graphics by Mohammad Arshad)
On September 15, 2015, Sadbhav Infrastructure, the asset-ownership business of Sadbhav Engineering, got listed on the stock exchanges at 8% premium to its IPO price of INR103 a share. The listing had a dual purpose – to raise funds to pare project debt and to give an exit to private-equity investors Xander and Norwest. In less than five Gayatri Highways, which debuted on the exchanges last year after the business was demerged from its EPC-focused parent Gayatri Projects. Gayatri Highways has lost more than 86% of its valuation since listing, while Gammon Infraprojects has seen its market cap decline from INR591 crore in FY14 to INR56.5 crore at the end of FY19. ( Graphics by Mohammad Arshad)

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