SJVN plans 5,000-Mw capacity addition; IPO likely in May

Hydropower generator SJVN plans to invest Rs 15,000-16,000 crore over the next five years to take its total capacity to 6,500 Mw from the current 1,500 Mw. Besides, the company plans to diversify into solar and wind power this year.

SJVN, a joint venture between the Centre and the Himachal Pradesh government, would raise funds for the proposed investment from internal accruals. The company has filed a draft red herring prospectus with the Securities and Exchange Board of India for its initial public offer (IPO), which is expected to hit the market in the last week of April or early May.

The Cabinet Committee on Economic Affairs last week approved the raising of Himachal Pradesh government's equity stake in the company by issuance of 27.8 million fresh shares for a value of Rs 40.79 crore. It would increase the company's paid-up capital to about Rs 4,137 crore. After increasing the share of the Himachal Pradesh government to 25.5 per cent, the Centre's share in the company has come down to 74.5 per cent from 75 per cent earlier.

The IPO is likely to raise Rs 1,200 crore, company officials said. The company had received approval from the Cabinet in October last year for 10 per cent disinvestment of the government's stake in SJVNL. The company is not raising any fresh equity.

The company's expansion plan includes one hydroelectric project at Rampur in Himachal Pradesh of 412 Mw. The project is already under construction and is expected to be completed in September 2013. Other two projects that are in pipeline include Luhri (775 Mw) and Khab Hydro Electric Project (1,020 Mw) in Himachal, for which detailed project reports have already been submitted.

The company has also bagged three projects in Uttarakhand, including Devsari Hydro Electric Project (252 Mw), Jakhol Sankri Hydro Electric Project (45 Mw) and Naitwar Mori Hydro Electric Project (59 Mw).

It also has a project of 402 Mw in Nepal, where it had signed a MoU with the Nepal government in 2008. Besides, SJVN also has two projects in Bhutan, including a 486-Mw one in Kholongehu and a 900-Mw plant in Wangchu. All the projects are expected to be commissioned over the next five years.