NCC expects to tie up funds for Krishnapatnam by July

Infrastructure major NCC Ltd said it would achieve financial closure by July for the 1,320mw power project proposed at Krishnapatnam in Andhra Pradesh. The project would be operational in 39 months from  the financial closure.

“The debt for the project is in place. We are hopeful of achieving financial closure by July this year,” YD Murthy, NCC’s executive vice-president (finance) said.

Rural Electrification Corporation leads the lenders’ consortium with Power Financing Corporation and ICICI Bank as the other members in it. “We would raise Rs5,400 crore as debt while Rs1,700 crore would be in the form of equity,” Murthy said.

NCC has invested Rs150 crore in the power project following its acquisition from the Chennai-based Nelcast. “We will invest another Rs250 crore as equity by the time of achieving financial closure. The total equity that NCC will have to contribute would be about Rs910 crore,” he said.

As of March 31, 2011, the company has Rs140 crore in the form of cash and bank balance. However, it is hopeful of meeting the equity contribution requirements through the internal accruals and short-term borrowings without diluting its equity.

In 39 and 42 months of its financial closure, phase one and phase two of 660mw each, respectively, would be operating.

Of the first phase, the company would supply about 400mw to Karnataka. “The PPA with the Karnataka government is for supply of power by August 2014. In case, we are not able to meet the schedule, we will have to buy power from other suppliers and provide it to Karnataka. However, we are hopeful of being on the schedule,” Murthy said.

The project would depend on linkage coal for 70% of its fuel requirement while the remaining would be imported.
For the year ended March 31, 2011, the company recorded Rs5,074 crore in revenue against Rs4,778 crore in the previous year. However, the company’s net profit declined from Rs192.19 crore in the last year to Rs163.45 crore.

On a consolidated basis, the company’s annual revenues were at Rs6,230 crore compared to Rs5,897 crore in the previous year with net profit at about Rs222.19 crore against Rs242.32 crore.

“We have recorded a shortfall in revenues to the extent of about Rs760 crore. The adverse weather conditions in second and third quarters have resulted in a revenue loss of about Rs173 crore. The delay in payments by clients and subsequent stoppage of work by the company resulted in about Rs\217 crore revenue loss.

The delay in land acquisition (Rs250 crore) and low-order booking (Rs120 crore) too has contributed to the drop in the topline,” he said.

NCC had guided addition of Rs10,000 crore to the order book at the beginning of FY11. However, it ended the year with a net addition of orders worth Rs6,800 crore. Murthy said the company would see a topline growth of 10-15% during the current financial year.