New Delhi: Gautam Thapar, group chairman and chief executive officer of Avantha group, said in an interview that Avantha Power and Infrastructure Ltd is not looking to be listed in the near future. Edited excerpts:
Thinking green: Gautam Thapar says Avantha Power will also look at non-conventional sources, such as wind or solar energy, in the future. Pankaj Nangia / Bloomberg
Are you looking at a listing for Avantha Power?
Not yet. We have just closed our financing, so we are not yet looking at it. Philosophically, my view is that we should get things done and then come to the market. We have got the first things done and we need to get few more things done. Ultimately yes, we will come to the market but not in the near future.
So not in the next 12-18 months?
Twelve months, I can say probably not. Maybe after that, let’s see. (It) depends. We have certain things that we are looking at right now in terms of growth.
What are the growth targets in the power business?
Well, we have got 2,400MW and we would like to have another 2,400-2,500MW, which we have pretty much in place. There are certain loose cells that we need to tighten up. I think if that second part comes in then we would certainly relook at everything again because that’s another big commitment. If you ideally want to look at it, a utility doing about 10,000MW would be a good size to be at and our goal is to try and get there. Then we take it from there.
So what starts happening is that as the space gets crowded, you have to be far more discerning about the projects you want to develop and those that you don’t want to develop. So the ones that we have on board are pithead-related, coal tied up, everything tied up, so those are from a risk point of view less of a factor. Going forward, we want to dial in non-conventional sources as well, so we will look at wind or solar as alternatives.
You are not looking at gas.
No. In an economy in which the base is coal that (gas) can only be a partial play. We don’t know what’s going to happen with nuclear. We certainly think that the government of India is going to be the main lead in that. That’s why we are not spending a huge amount of energy there.
One of the things that seems to be bothering you at Ballarpur Industries Ltd is the interest cost on the debt that you have taken on. How do you plan to deal with that?
Well, partly there are two assets... (and) the two assets have got capitalized. So we are expecting that they would start throwing off profits and they have and would continue to do so, which would allow us to pay off the debt. But if you are talking about any kind of fund equity raising, the answer is no. We are comfortable with what we have. We don’t think the amount of debt is a problem for us. We have added close to 420,000 tonnes of capacity, so it’s a huge capacity, doubling our size. Market is there, demand is there, prices are firm, so we are not unduly worried about the debt.