GIPCL considers public offer

Likely to fund Rs 1,000cr expansion via debt, equity

The Vadodara-based Rs 995 crore Gujarat Industries Power Company Ltd (GIPCL) is likely to go for a public offer to fund its Rs 1,000 crore expansion project.

The company will add two new units in the existing lignite power plant at Mangrol in Surat district.

The company has already obtained clearances from the concerned government agencies.

GIPCL is generating power from its two plants in Vadodara and the lignite power plant in Mangrol.

"We have already obtained the environment clearance for the expansion project of the Mangrol plant from the ministry of environment and forests during mid-November. We have finalised the plan for adding two new units of 125 MW each in this plant to enhance the total power generation to 500 MW against the existing 250 MW," managing director of GIPCL, L Chuaungo, said on Friday.

"The infrastructure for the expansion, including lignite from the nearby Valia captive mine and limestone from the existing Vastan mines, is already available while the land also has been acquired by the company," Chuaungo said.

GIPCL has made limestone handling system, oil handling system and lignite handling system available for the expansion.

The expanded facility is expected to be operational in 36 months. Besides the existing 250 MW capacity power plant at Mangrol, GIPCL also operates two more plants in Vadodara with 145 MW and 160 MW capacity.

GIPCL is promoted by the Gujarat State Fertiliser Corporation Ltd (GSFC), Gujarat Electricity Board (GEB), Gujarat Alkalies and Chemicals Ltd (GACL) and the Gas Authority of India Ltd (GAIL).

For its 145 MW plant in Vadodara, GIPCL buys gas from both GAIL and the Gujarat State Petroleum Corporation Ltd (GSPCL).

The 160 MW plant in Vadodara runs on the same arrangement, but this plant can also be run using naphtha.

"The expansion project will cost around Rs 995.66 crore at the estimated rate of Rs 3.98 crore for adding one MW power generation capacity. We are considering to fund 30 per cent of the project through debt and the remaining 30 per cent by way of equity. Though it has not been finalised yet, we may go for a public offer to meet the funding of around Rs 300 crore. But the state government clearance is necessary for going further with the plan," Chuaungo said. GIPCL has decided to enter the power distribution business by 2005.

"We have also chalked out a strategy to enable the company to enhance the power generating capacity to 2010 MW in the next six years. During that time, we will consolidate our presence in other areas of the power business," Chuaungo, a senior IAS officer, said.

GIPCL, which reported a sales of Rs 995 crore by the end of the last fiscal year, reported a turnover of Rs 446.41 crore by the end of the first half of the current fiscal year. By the end of the first half this year, the company's net profit stood at Rs 9 crore.

Officials expect that the net profit will grow higher by the end of this fiscal year against Rs 23.20 crore of the last fiscal year.

GIPCL registered a 15 per cent growth in turnover in the fiscal 2002-03, posting a turnover of Rs 971 crore compared to Rs 841.18 crore in the previous year.