PowerGrid ups 12th Plan capex by 10-15%; to sell 15% via OFS

PowerGrid Corporation has decided to revise upwards its capital expenditure for the 12th Plan period (2012-17) by 10-12% to meet expansion plans, a top official said.

The state-run firm has also decided to sell 15% stake through a follow-on public offer to raise funds but did not offer a timeline.

"We are constantly expanding our reach and undertaking new projects. We had earlier estimated a capex of Rs 1 trillion during the 12th Plan (2012-17). But with the kind of projects that we are pursuing, we think we will need more funds," PowerGrid Chairman and Managing Director R N Nayak told reporters here today.

He said the company plans to increase its capex plans by 10-12%.

"Earlier, we had planned a capex of Rs 20,000 crore per annum for five years, which would cater to the needs of projects or schemes to the tune of Rs 1 trillion over the five -year period. However, we are anticipating projects to the tune of Rs 1.1 trillion now. To meet the capital expenditure for projects of this volume, we will need more funds."

Accordingly, it has anticipated a capex of Rs 20,037 crore for FY13, Rs 22,150 crore for FY14, Rs 22,450 crore for FY15, Rs 22,500 crore for FY16 and Rs 22,550 crore in FY17.

"The additional capex will be required for various tariff-based bidding projects that we plan to undertake. Besides, it will be required for undertaking projects assigned by the Government, green energy corridors, intra-state projects and transnational interconnections," Nayak said.

The PSU will sell 15% stake through follow-on public offer (FPO). "This FPO will help us meet additional capex requirement," its Finance Director R T Agarwal said.

This would be the second time that PowerGrid would be going for FPO after November 2010.

Asked whether the company is looking at raising funds from overseas, Agarwal said, "that is always an option. We will evaluate the opportunities. If we feel the domestic option is cheaper, we will go for it."

The company's debt-equity ratio stands at 73:27. "We want to reduce the debt component. This was also one of the reasons for coming out with the FPO," another official said.

PowerGrid posted nearly 20% jump in net profit at Rs 1,040.34 crore in the June quarter.