SBI Caps' power sector mandates on the rise

SBI Capital Markets Ltd is banking heavily on the power sector and has received mandates for raising close to Rs 1,500 crore from various banks for power companies in Karnataka and Chattishgarh as well as their respective state electricity boards.

SBI Caps managing director and CEO, Indrajit Gupta, said this to the media at the sidelines of a loan signing ceremony here on Wednesday.

SBI Caps raised Rs 800 crore on behalf of Neepco from a consortium of 13 banks led by Punjab National Bank.

Gupta said with the government's plan of adding huge power generating capacity in the country in this Plan Period and the next, the company is looking for opportunities from all states and power generating companies that required funds for capacity expansion.

"Almost all power generating companies have large government debts and loans procured at high rate of interest ranging between 12 per cent and 16 per cent. We are trying to help these company swap these high-cost loans with lower cost ones from the market," he said.

One such company was Neepco, which had received loans of Rs 3,000 crore at 14 per cent rate of interest from the government, which it wanted to swap with low cost ones raised from the market.

It has in fact helped Neepco raise Rs 800 crore from a consortium of 13 banks. Around Rs 350 crore, which will be used to retire government debt, and another Rs 360 crore for pre-paying its loans availed from HUDCO at 9.75 per cent.

While the rest will be used to repay Rs 112 crore of debt availed from Life Insurance Corporation of India.

SBI Caps has also received mandates for raising funds used to swap high-cost debts for Delhi Vidyut Nigam and few other state electricity boards.

"We are keeping a tab on all state electricity boards. Further their requirement to bring back commercial viability to boards that are keen on debt restructuring which is a big opportunity for us," he said.

"SBI Caps is also actively involved in restructuring of the power sector in Assam and as business interests of the company grow in the North East, it is looking to set up a full-fledged office there in the near future," he added.