India Power Corp to lift generation capacity

Although faced with tepid power demand from distribution companies (discoms) as the energy scenario in the country remains muted, India Power Corporation (IPC) is focusing on increasing its generation capacity through the acquisition route as it believes that there will be a demand rebound in the next one and a half years.

After the acquisition of 89 per cent controlling stake in the 1,000 megawatt (Mw) Meenakshi Energy power plant in Nellore in Andhra Pradesh, the company has acquired a 36-Mw solar power plant from Punj Lloyd in Uttarakhand where it is investing Rs 225 crore. 

Currently, IPC’s generation capacity stands at 1,650 Mw, of which around 450 Mw has been commissioned while it has short-term power purchase agreements (PPAs) with Telangana and Andhra Pradesh for 200 Mw.

The company’s chairman, Hemant Kanoria, said that project commissioning is being delayed on account of tepid demand of power from discoms. However, the company is keeping provisions ready to commission the projects once demand starts picking up.

His son, Raghav Raj Kanoria, who will be taking charge as IPC’s additional director as well as managing director from June 1, said, “In another 1-1.5 years, we expect the demand from discoms to pick up.”

However, although its 250 Mw is idling on account of lack of PPAs, IPC isn’t keen to sell power to exchanges.

“The rate is low and we would prefer not to sell more than 30 per cent of the total generation to them,” Raghav Raj Kanoria said, adding that IPC is eyeing further acquisitions in Uttar Pradesh, Jharkhand, and Maharashtra, both in renewable as well as thermal categories.

Previously, Hemant Kanoria, who has targeted a 2,000-Mw capacity in the near term, had indicated that the company’s growth in power generation would be through the acquisition route and he will be eyeing stressed plants owned by private companies.

While the company, optimist about the power demand rebound, is focusing on expanding the generation portfolio, it is also keen to expand its distribution network as well from the current licences in Gaya in Bihar and Asansol in West Bengal.

“We will be looking at Rajasthan, Jharkhand, Odisha and Uttarakhand for distribution licences,” Raghav Raj Kanoria said.

Currently, the distribution business accounts for 50 per cent of the company’s turnover. However, its share is likely to fall to 25 per cent in the near term as the company will renew its focus on the generation business.

“Ideally we want to keep distribution’s share at 50 per cent”, he added.

For the financial year ended March 31, 2017, IPC posted a 1.43 per cent increase in its net profit at Rs 38.18 crore as against the profit of Rs 37.64 crore during 2015-16.