Gayatri Energy Ventures Private Limited, a wholly owned subsidiary of Gayatri Projects Limited, will add hydel, wind or gas-based projects to its energy portfolio. It will also pursue options to set up greenfield projects or acquire existing ones in Karnataka, Maharashtra and others states.
“The strategy is to expand vertically in the power segment,” said Gayatri Projects managing director TV Sandeep Kumar Reddy.
Gayatri Energy, through its step down subsidiary Thermal Powertech Corporation India Limited, is setting up a 2,640- Mw thermal power project at Krishnapatnam in Nellore district of Andhra Pradesh. The project, in which Singapore-based Sembcorp holds 51 per cent, has already achieved financial closure for the first phase. It is estimated to cost Rs 6,869 crore with debt component comprising Rs 5,151 crore and equity portion Rs 1,718 crore.
The construction at the site has begun and operations are likely to start in 2013. The balance of plant will be finalised by end this month or so, he said.
The order for boiler, turbine and others have been given to a Chinese company and coal and water linkages have been tied up. Gayatri has signed a power purchase agreement with Power Trading Corporation (PTC) for selling 70 per cent of power generated. It would sell the remaining 30 per cent on a merchant basis.
Reddy said the company had pledged the investment in equity shares of Gayatri Energy in favour of PTC India Limited for a loan of Rs 100 crore, sanctioned to Thermal Powertech.
The second phase of the project — 1,320 Mw — would be taken up shortly. “We will be in a position to increase debt as more institutions would be willing to fund,” Reddy said, adding the power vertical Gayatri Energy would also seek PE funds in the second phase.
The parent company plans to take Gayatri Energy and another subsidiary Gayatri Infra Ventures Limited public in two or three years.
Gayatri Infra Currently, Gayatri Infra has five BOT (build, operate and transfer) projects including one toll-based and four annuity-based. All the projects have achieved financial closure and would commence operations from FY11. It has diluted 29.4 percent stake to AMP Capital Finance Mauritius Limited for Rs 100 crore, valuing the company at Rs 340 crore, for meeting the ongoing capital needs of its existing projects and also for future bids and concessions. AMP Capital will consider further equity infusion of Rs 100 crore depending on the need.
The company expects revenues of Rs 150 crore from the road projects this financial year even as one project in Uttar Pradesh and one in Hyderabad are getting ready for commercial operations in November. The company is hopeful of touching Rs 5, 500 crore revenues in three years with infra vertical contributing around Rs 600 crore and power vertical Rs 5,000 crore once the two phases of the thermal power plant at Krishnapatnam are completed.
Gayatri Projects turnover stood at Rs 1,252.48 crore as of March 2010 while profit after tax was Rs 53.34 crore as compared with Rs 1,011.3 crore and Rs 41.61 crore respectively during the same period last year.
Reddy said the focus was on improving the margins by the reducing the costs and completing the projects according to schedules. The company has an order book of Rs 7,000 crore including Rs 3,672 crore in irrigation, Rs 770 crore in roads division, Rs 1,562 crore in road and BOT projects and Rs 1,000 crore from other projects.
The company is hopeful of adding another Rs 2,000 crore to the order book by the end of this quarter. “The revenue visibility from these orders will take about three years,” the managing director said.