Q&A: L Madhusudhan Rao, Lanco Infratech

'In 10 years, we will commission 5,000 Mw internationally'

Private infrastructure and power company, Lanco Infratech, has gone for a rebranding exercise after 25 years to represent the changing times, its global aspirations and diverse businesses. In an interview with Mansi Taneja, Executive Chairman L Madhusudhan Rao talks about the the company’s plans to invest Rs 35,000 crore to take the installed capacity to 15,000 Mw by 2015. Edited excerpts:

Why did you feel the need to change the logo and, in a way, changing the company's identity after 25 years? Are you trying to move away from an image of a regional player?
We are looking to build a brand from a global perspective, from a regional player to an international one. We are equally distributed in the country today, not just Andhra Pradesh. But our roots, of course, will always be there. We have shifted our headquarters to Gurgaon. It makes good business sense with regards to connectivity, consulting and financing point of view. Having a base in Hyderabad did not add value since the senior leadership was always away.

Further, we wanted to be recognised as a professional organisation, committed to business excellence.

You have changed your tag line to ‘Always Inspiring’ from ‘Inspiring Growth’. What does the new logo represent?
The new Lanco is about youthfulness and a modernity, and the red colour represents energy. We started from being a regional player, now we are expanding across the globe. In this new journey, inspiration will be our foundation. That is what our new tag line represents.

What are your expansion plans?
Currently, we have an installed capacity of 3,300 Mw. We have achieved financial closure of another 6,000 Mw, which is under construction. The remaining 6,200 Mw is under advanced development and will need an investment of Rs 35,000 crore. We plan to have an installed capacity of 15,000 Mw by 2015.

How do you plan to fund this investment?
The money will be raised through debt/equity ratio of 80:20. We are in discussions with various banks and financial institutions, including Chinese, to raise the money. We may look at multiple model of financing for the new projects.

What is your strategy for overseas market, especially new projects? Last year, you had acquired coal mines in Australia, Griffin Coal. Are you eying any other?
After Griffin, we have been evaluating some options. Griffin will meet our requirements for next seven to eight years. Currently, we are looking for coal mines in Australia, Africa and Indonesia. If we get a good opportunity, we will definitely look into it.

We have bid for new engineering, procurement and construction (EPC) power projects in emerging markets. We have a qualified team, which is looking into this. We have qualified in various regions and expect to bag some EPC projects in Bangladesh and Indonesia, soon. Power projects require a long gestation period. So, it needs to be looked from a 10-year perspective. In the next 10 years we will look at commissioning 5,000 Mw internationally.

You have mentioned your plans to hive off core businesses. When will that happen, and what's plan about list them?
We have five business verticals — power, solar, construction, natural resources and infrastructure, and most of our revenues come from power and construction segment. We want to list all our verticals, eventually. That may happen in the next two years.