Mumbai: Tata Power Co. Ltd said it may sell stakes in holding companies and assets to help fund its $6 billion (Rs24,060 crore) capacity expansion plans.
Tata Power, India’s oldest private power producer, plans to raise its power generation capacity by more than five times to nearly 13,000MW by 2013, the company said in an analyst presentation released on Friday.
The firm, which is part of salt-to-software Tata group, is an electricity supplier in Mumbai, and operates a distribution arm in New Delhi.
The presentation showed the company would use Rs6,000 crore of internal funds and raise debt of Rs18,000 crore to pay for its expansion plans.
The company said it had Rs2,900 crore of funds in hand and had raised another Rs1,900 crore through a preferential issue of warrants to holding company Tata Sons Ltd. The remainder of the internal funds would be raised through “disinvestment of various holdings or assets” and “equity dilution through warrants, preferential issue and/or rights if required”, Tata Power said.
The company said other debt would be raised in loans through domestic financial institutions, banks and capital markets, and foreign loans through credit and multilateral agencies.
Shares in the company rose 3.6% to Rs1,211.15, their highest close since 4 March, in a Mumbai market that rose 2.2%.
The company also said it had set up a unit in Singapore to acquire ships for the transport and trading of coal. TPC Energy Asia Pvt. Ltd would buy ships or enter into long-term contracts for charter hire of ships, and use spare capacity to transport other firms’ cargoes.
Earlier this month, the company had said it may enter the coal shipping business to import more coal for its coastal power plants.
Last year Tata Power bought 30% stake in two coal mines owned by Indonesia’s largest coal producer, PT Bumi Resources Tbk, for more than $1 billion.
India plans to add more than 78,000MW of capacity by setting up new power projects, mostly coal-fired, in the next five years.
The country suffers a huge power shortage, with over 400 million of its 1.1 billion people having no access to electricity, according to the United Nations Human Development Report (UNDP).
India and China will lead a 73% leap in world coal demand to 4,994 million tonnes (mt) of oil equivalent by 2030 and 2,892mt in 2005, UNDP said in late 2007.