GVK Energy today signed agreements for a second round of private equity (PE) investment worth Rs 698 crore from US-based Actis and an affiliate of the Government of Singapore Investment Corporation (GIC). Both would invest Rs 349 crore each in GVK Energy, a wholly owned subsidiary of Hyderabad-based GVK Power and Infrastructure (GVKPIL).
A month before, UK-based 3i invested Rs 800 crore in the company from its $1.2-billion (Rs 5,440 crore) India Infrastructure Fund (IIF). 3i also led a part of the financing and arranged GIC’s investment in the company. GVK itself spoke to Actis.
For Actis, this is the second significant investment in the infrastructure sector this year. It invested $77.5 million (Rs 351 crore) in TRIL Roads, a subsidiary of Tata Realty and Infrastructure.
After these developments, the overall PE investment in GVK Energy is Rs 1,498 crore, with dilution of 24.97 per cent. The deal valued the company which has operational capacity of 909 Mw, with 4,200 Mw more under various stages of development, at around Rs 6,000 crore.
“Actis and GIC’s affiliate will bring in Rs 218 crore each as the first tranche of investment,” the company said.
In May, GVKPIL, an infrastructure company with interests in airports, roads, special economic zones and power, decided to form separate holding companies and categorise projects under separate divisionss such as energy, airports etc, to operate its various assets. The same month, the company started talks with PE funds, for a strategic investment.
“GVK developed India’s first independent power project. Today, we are poised to significantly grow our energy business to meet the growing demand in India. While this strategic transaction will enable GVK Energy to deploy further capital, we believe both Actis and GIC will prove ideal partners in the next phase of the company’s growth,” said G V Krishna Reddy, Chairman, GVKPIL.
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GVK Energy put its power expansion plans on a fast track after its 264-Mw Jegurupadu project started operating at full capacity last year, with natural gas supply from the Krishna-Godavari (KG) basin. It is expanding the project by 800 Mw and also setting up the 800-Mw, gas-based, Gautami power project. Both are in Andhra Pradesh, close to the KG basin.
It is also developing a 540-Mw, coal-based power project at Goindwal Sahib in Punjab, with a proposed expansion by 700 Mw. It has three hydel projects under development at Rishikesh, Gauriganga and Ratle,with a combined capacity of 1,390 Mw.
GVKPIL’s shares went up by 0.3 per cent in today’s trade,to close at Rs 39 per share on the Bombay Stock Exchange.