GMR Energy to set up 1,000 Mw power plant

GMR Energy Ltd is planning to set up a 1,000 Mw coal-based thermal project shortly, at a cost of Rs 4,000 crore. The company is also planning to acquire stakes in coal mines in India and overseas and has firmed up plans to enter the power transmission business.

"We want to be in all the profitable areas of power business across all the verticals," head, strategic finance, GMR Group, Madhu Terdal told Business Standard. The GMR Group plans to invest $ 1 billion for its new projects in the energy sector in the areas of generation and transmission.

The company intends to raise $ 750 million through a combination of equity and debt over the next five years for its infrastructure projects in energy, road and airport sectors.

The proposed power plant will be of two units of 500 MW each and the company is presently looking at Madhya Pradesh, Jharkhand and Orissa as the potential project sites.

"We are looking at Indonesia and Australia for half-a-million-tonne size mine. If we have a captive mining for the power plant in India our debt to equity ratio will be 75:25," Terdal said. The company has also identified a few potential pockets in Madhya Pradesh, Jharkhand and Orissa for acquiring a coal mine stake.

Further, the company has entered into a JV with KEC International Ltd for developing transmission projects. The company will be bidding for Build Own Operate and Transfer projects. "We will be entering the power distribution business as and when it opens," Terdal added.

The company has also got a power trading licence and intends to venture into the power trading business shortly.

The company, which is shortly going in for an IPO, aims to raise Rs 550 to Rs 800 crore from the public issue. The company has made total investments of Rs 2,900 crore for its energy ventures till date.

GMR Energy Ltd had a turnover of Rs 1,100 crore in 2004-05 out of its two energy ventures.

The net profit for GMR Energy Ltd for 2004-05 was Rs 115 crore and it expects to rake in the same margin this year.