Temasek in talks to invest in GMR, Indian utilities

Temasek in talks to invest in GMR, Indian utilities
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First Published: Tue, Apr 06 2010. 11 49 PM IST

Power play: Temasek’s Wong says the firm is more interested in power utilities than projects. Bloomberg
Power play: Temasek’s Wong says the firm is more interested in power utilities than projects. Bloomberg
Updated: Tue, Apr 06 2010. 11 49 PM IST
Singapore: Singapore state investment company Temasek Holdings Pte Ltd is seeking stakes in Indian power producers including the GMR Group as they double capacity to meet demand in the world’s second fastest growing major economy.
“We are in advanced discussions with GMR,” Wong Kim Yin, managing director for energy investments at Temasek, told reporters at a power conference in Singapore on Tuesday. “We are trying to get exposure to the domestic India markets.”
Power play: Temasek’s Wong says the firm is more interested in power utilities than projects. Bloomberg
Temasek, manager of around $123 billion (around Rs5.5 trillion) of assets, is betting utilities will ramp up generation in the next seven years to overcome power shortages that the Indian government says are constraining economic growth.
Temasek is probably entering at the right time as the sector and the company have a lot to offer in the short term, said Abhineet Anand, a Mumbai-based analyst with Antique Stock Broking Ltd. He recommends investors buy shares of GMR Infrastructure Ltd, a unit of the GMR Group, with a one-year price target of Rs82.
GMR Infrastructure fell 1.7% to Rs62.15 in Mumbai trading compared with a 0.1% gain in the Sensex. The stock has climbed 24% in a year.
A. Subba Rao, chief financial officer of the GMR Group, denied on 15 December an ‘Economic Times’ report that the group was in talks with Temasek and ICICI Bank Ltd to raise funds to build power plants. He couldn’t be immediately reached at his office on Tuesday for comment.
“Typically we look more at investing in power companies than in power projects,” Wong said, in reply to a question on whether Temasek was investing in new generators in India.
Temasek, which has invested in resources companies and financial institutions including ICICI Bank, India’s second biggest lender, is in talks with a number of players, Wong said.
Finance minister Pranab Mukherjee said last month that inadequate supply of coal, gas and power is worrying as it constrains economic growth. Prime Minister Manmohan Singh called for a partnership between the government and companies to increase power generation.
In places like India and China, sources of funding remain domestic, Temasek’s Wong said at the conference. It is unclear if funding will continue without government stimulus. Equity markets offer sources of funding and Singapore is relatively untapped by the power industry, he said.
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First Published: Tue, Apr 06 2010. 11 49 PM IST