Infrastructure firm Lanco Infratech plans to launch an initial public offering for its power business in September 2011. The company is currently working on hiving off the power business into a new firm and hopes to complete it by June this year.
Lanco has a long-term plan to increase its power generation capacity from nearly 2,100 MW to 15,000 mw by year 2015 and needs funds to finance the same. The IPO would be to offload 10% in the power company. ?We are going for a massive expansion in power capacity by year 2015. This capacity will have to be managed under a separate firm. For this reason, we are hiving off our power business into a separate company. We would go for IPO after that,? Lanco Infratech chairman Madhusudan Rao told FE.
The company?s executive vice-chairman G Bhaskara Rao said the restructuring is likely to be completed by June 2011 and the IPO would be floated in September, if the market acts favourably. ?We would offload a minimum equity of 10% in the power business,? he added.
Lanco Infratech on Thursday laid the foundation stone of 250 mw solar equipment manufacturing facility near Raipur, Chhattisgarh. The company would invest Rs 3,000 crore in setting up the project in next three years. In the first phase, the total investment would be Rs 1,370 crore. ?The project is to be funded through debt-equity ratio of 75:25 and we have tied up the entire debt component,? Madhusudan Rao said. Axis Bank is the lead banker for the project, he added. The company expects to export 15% of equipment from this plant to western countries.
The company has plans to set up 1,500 mw of gas-fired power plants but everything depends on gas allocation by the government. On Kondapalli power plant, Madhusudan Rao said his company is likely to get the assured gas allocation for its 1,476 MW plant at Kondapalli in Andhra Pradesh.
?We have four cycle commissioning plan, which starts from June 2011 and ends in February 2012. I hope we will get the allocation by the time the entire plant is commissioned,? he said.
The empowered group of ministers, headed by finance minister Pranab Mukherjee, hasn’t met on the issue of gas allocation to new plants. Earlier, the eGoM had allocated 90 mmscmd of gas among users, including power firms. However, RIL hasn?t been able to reach the production of 90 mmscmd gas from its KG-D6 basin till now. Therefore, the government cannot take a call on allocating further gas to anyone.