Nagarjuna Construction Company Limited, which changed its name to NCC Limited from today, will soon achieve financial closure for the 1,320 Megawatt thermal power project, which it acquired from Chennai-based Nelcast Energy, proposed at Krishnapatnam in Nellore district of Andhra Pradesh.
NCC had recently acquired 55 per cent equity in Nelcast Energy Corporation Ltd through its subsidiary NCC Power Projects Ltd. Nelcast had secured necessary clearance for developing the thermal project. The remaining 45 per cent stake is held by Gayatri Projects Limited.
Of the total project cost of Rs 5,285 crore, the company today said it had tied up Rs 3,200 crore as debt from REC and Power Finance Corporation (PFC), and was in talks with State Bank of India and ICICI Bank to raise Rs 1,000 crore from each for the balance amount. It is also keeping options open for an equity dilution post financial closure, which is expected to be completed in the next three months.
Speaking to the media in connection with the change of brand name as well as logo, YD Murthy, executive vice president of NCC Limited, said the company had got the coal linkage and funding tieups meant for the 1,980- Mw project Sompeta project, which has been put off, transferred to the Krishnapatnam project.
“Of the Rs 250 crore equity required at the time of financial closure, we have already invested Rs 150 crore in the project,” Murthy said. The Krishnapatnam project would be completed in 39-42 months from the date of financial closure.
Though the existing coal linkage has come in handy for the new project, the transfer means covering an additional distance of 700 km from Mahanadi coalfields, which is expected to add a cost of 15 paise for every unit of power generated, according to KV Rao, CEO of NCC Infra limited. The project would use a mix of domestic and overseas coal at 70:30 ratio.
The company has entered into an agreement with the Karnataka government to supply of 400 Mw power while the bidding for 500 Mw supply to Andhra Pradesh power utilities is yet to be finalised.
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On the Sompeta thermal power project, he said the company had already sent an application to the Ministry of Environment for revival of environmental clearances in order to take up the project in the XII Plan period.
The ministry had suspended environmental clearances to the project on the grounds that the land acquired for the project forms part of marsh land after protests by the locals . It had so far spent Rs 82 crore, which includes Rs 45 crore on land acquired from farmers.
Stating that the profit margins would continue to be depressed at 3.45-4 per cent due to rising interest rates, he also hinted at a shortfall in consolidated turnover to between Rs 6,500 crore and Rs 6,700 crore for the current financial year as against the anticipated Rs 7,000 crore. “Based on the macro economic indicators and other factors, we expect our topline growth at 15-20 per cent in the next 2-3 years,” he said.
Infrastructure projects account for 65 per cent of the total turnover.
Despite a slide in net profit margins, the company is hopeful meeting the funding requirements for new projects being executed by three verticals — namely NCC Infrastructure, NCC Urban and NCC International — mostly through internal accruals as the five road projects are slated to give about Rs 320 crore toll revenues starting next year.
Of the six overseas projects being executed by NCC International at an investment of Rs 600 crore, a villa project in Abu Dhabi, a water project and a second road project in Dubai, have so far been completed.
The group reported total revenues of Rs 5,900 crore.