The Banking and Strategy Initiative

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Moving India’s Power | Advantage zyaada

Even as the market awaits the RBI Macro Economic Review and the hike which some now say has come to 25 bp after the heavy breathing in the morning, Power Infrastructure continues to lag in our analysis along with roads, railway and ports while Telecom and Oil Energy keep getting a disproportionate share of investment,. With Oil likely to push below $80 some more news is likely to surface regarding the Power sector infrastructure.

Power Grid has a $1.1 billion order for a 4.4GW UMPP project while BHEL has also received an order worth $1.5 billion for 1.6 GW Power Plant Equipment. 3i’s $ 2billion fund from UK and Goldman Sachs Capital Partners have already invested in two $100 million Power ventures while Temasek has invested in GMR’s consolidated Power unit in GMR Energy. Multiples floated by Renuka Ramnath also has some funds in hand now with a $200mn fund . GVK Energy is ready to tap the market for a fresh infusion of $300 million for Power and allied coal mining while Transco projects are in line to take off to aid Power Grid in reaching more homes and complete the national grid. GVK had earlier raised its stakes in GVK Power & Infrastructure Ltd to 27.6% GVKPIL is the parent of GVK Energy.

Also GVK Aviation is now an independent structure buying stakes in MIAL( 37%) and BIAL(29%) to increase its current holdings and also bidding for an Airport development in Maldives. The Aviation company for MIAL is now more easily qualified as a real estate investment with 200 acres being developed as a hospitality and shopping district in Mumbai.

ARSS Lanco and IVRCL are among the infra stocks back in the reckoning as Markets get to serious business for FY 2011 Also Petro stocks like ABAN and Petron are likely to come back in the new fiscal as gas production ramps up and maybe international investments in the sector work out for OVL

Coming back to Power, Nuclear Power and Renewable sources are likely to start gaining traction. Each unit in Solar, Wind and Nuclear Energy is a smaller 10-50 MW generation unit. On the other hand conventional sources have bigger requirements, GMR Energy not satisfied with $200 mn from Temasek last week is still adding another $100 million in PE investment along with a QIP for the parent GMR Infrastructure. GMR is adding 4.4 GW in Power generation capacity this year and needs $5 billion for the projects.

Indian Power projects are discussing with the government for ways around the ban on Chinese imports and project visas for service & Installation teams in the sector.

[Tag Power, India infrastructure, Power Infrastructure, Energy Infrastructure, GMR Energy, Power Grid Corpn, PGC, REC, BHEL]


This entry was posted on April 19, 2010 by in India, India Infrastructure.


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