GVK Power Plans to sell 20% in unit

GVK Power & Infrastructure plans to sell 20 per cent of its electricity business to fund expansion, Chairman GV Krishna Reddy said.

The New Delhi-based company is in talks with Standard Chartered Bank, Merrill Lynch and Cityspring Infrastructure Trust, a unit of Singapore’s Temasek Holdings Pte, for the stake sale, Reddy said in an interview today.

Indian power producers are expanding capacity to meet rising demand from homes, offices and industries in the world’s second-most populous country. India needs to spend $100 billion each year until 2012 on adding capacity to beat shortages of 15 per cent during peak hours.

The company may consider listing the electricity business in India after selling shares to banks, Reddy said, without giving details. “If you tie up with a good institution like a bank, when you issue to the public later, they will have more confidence,’’ he said.