Limited has decided to exit the two joint venture power projects
at a time when the infrastructure company is getting back to 15 per cent growth after seeing the bottom with 3 per cent last year.
“We have decided to exit the power sector essentially to bring down the debt on our company’s books,” said Y D Murthy, executive vice president (Finance) of NCC Limited. It has already brought down its debt to Rs 2,500 crore from the earlier Rs 2,700 crore and is looking at further pruning it to Rs 2,300 crore, according to him.
The company, which had achieved a topline of Rs 6,600 crore last year, has been conservative in leveraging its books unlike some of its counterparts from Andhra Pradesh as its debt to equity ratio stands at 1:1.5 while it now wants to bring it further down to 1.2-1.3.
Murthy confirmed a recent report of a 5 per cent stake sale in Himachal Sorang Power Limited (HSPL), which is about to complete the 100Mw run-off-the river hydro electric project in Himachal Pradesh.
However, he refused to disclose the name of the investor company. NCC and IL&FS hold 67 per cent and 33 per cent in the special purpose vehicle respectively and together would sell 100 per cent interest in this project to the company that would operate the plant after acquisition.
The Rs 600-crore project is expected to be completed in another 3-4 months. The promoters are allowed to sell the entire stake only six months after announcing the COD (commissioning date).
Early this month an agency report, citing sources, said Abu Dhabi National Energy Company PJSC (TAQA) had acquired the 5 per cent stake in HSPL through a joint venture formed with Mumbai-based Jyoti Structures Limited.
The second project the company wants to exit is the 1,320-Mw coal fired project at Krishnapatnam in Andhra Pradesh. NCC and Gayatri Project Ltd hold 55 per cent and 45 per cent equity respectively in this.
The company had so far spent about Rs 300 crore on the project and is in discussions with potential buyers, according to Murthy.
NCC had kept yet another hydro electric project on hold, proposed on Teesta river in Sikkim, as the project did not get the required environmental clearances, according to him.
On why the progress on stake sale in power and infrastructure projects in general has been slow, Murthy said his company’s endeavour was get the right value for the equity while the buyers looked for huge discounts in a bid to take advantage of the present scenario.
The company expects to achieve the Rs 7,000-crore revenue mark in the current fiscal.