One can also look at the ongoing IPO of BGR since Citi Venture and Reliance MF have bought in pre-IPO placement.

 

I'm into (power + infrastructure) theme with Adani Enterprises, GVK Power and JP Associates.

 

GVK Infra & Power seems to be the most interesting of the three. It's current market cap is Rs. 10,000 crores. They have a 1000 MW under operation and 1000 MW more under development. So if we use the Equitymaster.com formula, this alone with worth Rs. 8,000 crores. The Mumbai Airport comes almost for free.

 

But right now, the markets are enamoured by the big guys like Reliance Power. It might take some time for the investors to look at smaller ones like GVK.

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Hey, waitaminute. You were not talking about me, were you?

 

GVK just gave a contract of Rs. 5,000 crore to L&T to upgrade the Mumbai Airport. So on book value basis alone, GVK is worth around (5000 + 8000) = Rs. 13,000 crores.

 

But the reason why GVK is under the radar is that they messed up initially. GVK was originally a holding company whose earnings were based on trading and dividend income. Obviously, the market ignored the stock. The promoters must have realized the problem and dissolved the operating companies under GVK and amalgamated it with GVK.

 

So GVK is now no longer a holding company - and they restated their previous years' earnings. But GVK will never reach the valuation of GMR - because GMR holds a few thousand acres of land.

 

Building airports costs money. So in a public-private partnership for a Greenfield airport, the Govt gives XXXX acres of land to the infrastructure developer - so that he could develop the land to pay for the airport construction.

 

GVK was not assigned much land probably because their Mumbai project is not a greenfield airport. But I still wonder how they will manage to raise Rs. 5,000 crores? Disclosures are quite poor.