PowerGrid plans Rs 10,000-cr bond issue in 2011-12
PowerGrid, the country’s largest transmission firm, plans to issue domestic bonds for about Rs 10,000 crore in 2011-12 to meet its expansion needs. It has planned a 50 per cent increase in its capital expenditure to Rs 18,000 crore for the next year.
The company may also go in for another follow-on public offer (FPO). “We will raise about Rs 10,000 crore in phases through domestic bonds in the next fiscal year. For the current fiscal, we have raised a major portion of the targeted Rs 7,000 crore from domestic bonds and whatever is remaining will be raised in the ongoing last quarter,” a senior company executive told Business Standard.
In November last year, PowerGrid had raised about Rs 7,500 crore+ through an FPO, where half of the proceeds went to the government. The government had divested 10 per cent of its 86.36 per cent stake and the company had raised an equal percentage of fresh equity through the offer. It will use funds from the FPO for its projects in the remaining period of the current plan period (2007-12) and for the initial projects in the 12th plan.
“We have enough funds for the next two-three years to meet our expansion needs. The money raised through an FPO in November last year and internal accruals will be sufficient for a couple of years. Subsequently, we may go in for another issue, depending upon the requirements,” the executive added.
The company got listed in 2007, with the government offloading five per cent equity and 10 per cent fresh equity. The company plans to make an investment of Rs 85,000 crore in transmission projects over the 11th and 12th Plan period, besides planning to augment its transmission capacity by 18.2 per cent in the current financial year, to 23,400 Mw from 19,800 Mw in 2009-10.
PowerGrid owns and operates around 72,000 circuit km of transmission lines and transmits 45 per cent of the total power generated in the country. It also owns 1,50,000 transmission towers across the country, with almost 70 per cent of these located in semi-urban and rural areas.
With India planning to add 78,700 Mw of generation capacity during the 11th Plan and another 1,00,000 Mw in the 12th Plan, huge investment in transmission will be required for evacuation of electricity.