Power Grid, the country’s largest transmission company, has decided it would require a fresh equity infusion of Rs 5,000 crore in another two years.
“We plan to raise Rs 5,000-7,000 crore through a follow-on public offer (FPO). The process will start in 2013-14 and we expect to complete it by the end of that financial year. We have already informed the ministry of power about this plan,” S K Chaturvedi, chairman of the government-owned company, told Business Standard.
Such an issue of fresh equity would bring down the government’s stake in the company to less than 60 per cent from the current 66 per cent.
In November last year, Power Grid had raised about Rs 7,500 crore through an FPO, where half of the proceeds went to the government.
The government had divested 10 per cent of its 86.36 per cent stake and the company had raised an equal percentage of fresh equity through the offer.
Of the Rs 3,700 crore, the company has already spent Rs 1,700 crore and the rest would be invested this year and the next, Chaturvedi said.
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The company has planned an investment of aboutRs 1 lakh crore for the 12th five-year plan, for both ongoing and new projects. It is already in discussions with the World Bank and Asian Development Bank for raising $1 billion (Rs 4,432 crore) and $750 million (Rs 3,324 crore). The rest of the investment for the 12th Plan will come through internal resources and domestic bonds. The loan approval with the World Bank and ADB would be finalised in the next three to four months, he added.
Power Grid had hit the capital market in October 2007 with its maiden public offer, comprising issuance of 10 per cent fresh equity and five per cent disinvestment by the government. The transmission firm owns and operates around 85,000 circuit km of transmission lines and alone transmits 45 per cent of the power generated in the country. It also owns 150,000 power transmission towers across the country, with almost 70 per cent of these in semi-urban and rural areas.