Yash Birla Group to invest Rs 5,500 cr in power, lifestyle

The Yash Birla Group is planning an investment of over Rs 5,500 crore over the next three years in emerging business segments like thermal and solar power, wellness and lifestyle, garments and education.

Birla Urja and Birla Energy Infra, two newly-floated subsidiaries of genset maker Birla Power Solutions, will spearhead the Rs 3,000-crore turnover group’s foray into thermal and renewable energy.

Initially, Birla Urja will set up a 600-megawatt (Mw) coal-fired power plant at Dhule district in Maharashtra, with an investment of about Rs 3,000 crore and 20 Mw of grid connected solar power through three projects in Rajasthan, Haryana and Uttarkhand, and 50 Mw in Andhra Pradesh.

“We are planning 125 Mw of solar power with an investment of Rs 2,000 crore, utilising the incentives offered by the government to promote solar power,” said Yash Birla, chairman of the group, which currently constitutes over 20 companies, including eight stock exchange-listed entities.

The group will invest 30 per cent of the total investment as equity portion and is already talking to private equity players for investments in the two new subsidiaries.

“We will retain majority stake in the subsidiaries and at a later stage can approach the capital market for raising funds, if required,” he said.

Birla Power is now raising Rs 100 crore through American depository receipts (ADRs) to initiate work on the power plant, said P V R Murthy, group director, Yash Birla Group.

Birla Power had informed stock exchanges that its board of directors would meet on March 25 to consider increasing its authorised shared capital or raise funds by issue of global depository receipts, ADRs and foreign currency convertible bonds and equity shares or any other instrument convertible into equity shares.

The power plant, which will start production within three years, will use half of the power produced for captive consumption among group companies and the rest will be sold as merchant power. The group has already acquired majority of the land required for the project and is in advanced stages of discussions for various clearances, said Yash Birla.

In the education segment, the group is planning an investment of over Rs 500 crore. It plans to set up a university in Mumbai, besides 40 schools with classes up to 12th standard under the brand name ‘Globe Trotters,’ in various cities.

The Yash Birla Group had floated a company named Birla Edutech and had acquired Melstar, an information technology (IT) application management company, in 2008 to enter the education and IT business sectors.

The group is looking at wellness and lifestyle as another growth driver and has floated half a dozen incubation companies in this segment. Its Birla Pacific Medspa runs ‘Evolve,’ a joint venture between Yash Birla Group and Pacific Healthcare to set up healthcare spas. While Birla Lifesciences offers healthcare products through branded stores, Birla Kerala Vaidyashala offers authentic ayurvedic treatment.