The energy major has increased stake in the project from 18.75 per cent to 23.75 per cent in phase I. Phase I of the 235-mw gas-based project has been promoted by the US-based non-resident Indian GVK Reddy. The GVK group has at present a 48 per cent stake in phase -I of the project.

Confirming the hike a CMS spokesperson said, "The hike in equity was nothing more than an implementation of a previously agreed change that was part of the original project partnership's understanding."

The move has been necessiated as a result of the exit of Swedish energy major Asean Brown Bowery (ABB) from the project after it was bought over by Alsthom group. Subsequent to the takeover the Alsthom group decided to offload the entire stake of ABB. As per details available, GVK group has 48 per cent stake and CMS 23.75 per cent. The remaining shares are held by world bank affiliate International Finance Corporation (IFC) which has a 10 per cent stake along with AIF of Hong Kong.

Aptransco holds 3 per cent and the public has seven to eight per cent. The company official, however, declined to give details of the price of the share while it is learnt that the shares had been sold at a premium. The shares had initially been picked up by ABB at par. The shares of ABB were picked up by CMS in December.

Gvk group is expanding the power project by adding another 230 mw in the second phase, thereby taking the total capacity to 665 mw. The expansion is likely to cost Rs 650 crore translating into an equity component of nearly Rs 200 crore.

The foreign exchange component has been pegged at forty per cent of the total project cost of Rs 930 crore. The company is in the process of tying up funds for the second stage, construction of which is expected to begin by March, 2001.

Gvk on the other hand has been promoting the 500 mw coalfired Krishnapattnam project in Andhra Pradesh along with the 120 mw diesel-based Ratlam power project in Madhya Pradesh.