Bhushan Energy, the power subsidiary of secondary steel manufacturer Bhushan Steel Ltd (BSL), plans to diversify into hydro power generation.
MUMBAI: Bhushan Energy, the power subsidiary of secondary steel manufacturer Bhushan Steel Ltd (BSL), plans to diversify into hydro power generation.
The company, incorporated in 2005, has so far been involved in generation of thermal power and has embarked on three major projects in Orissa, West Bengal and Chhattisgarh to augment its capacity from 110 MW now to 4,000 MW in the next 4-5 years.
It also plans an initial public offering (IPO) in the second half of 2008 to raise capital for funding the projects.
Nitin Johari, director-finance, Bhushan Group said, “since Bhushan Energy was floated for ventures into power projects, the company is open to all opportunities. However, we are currently exploring possibilities for hydro power generation in Himachal Pradesh or North-East.”
Johari said Bhushan Energy has not set any deadline for taking a final decision on the hydro power foray, but is looking at some good projects in the country. Once the current thermal power projects are on track and a venture into hydro power is announced, it would look to tap other forms of energy, too, he said.
The flagship company of the group, BSL, recently announced a steel plant in Kharagpur, West Bengal with a capacity of 2 million tonnes per annum (mtpa). “This plant will also be accompanied by a 1,000 MW power plant to be executed through Bhushan Energy. The land for the project has already been identified,” he said.
It also plans a 2,000 MW thermal power plant in Orissa and has earmarked close to 2,500 acres for the same. “We are under different stages of land acquisition and it would take some time to complete the process and tie up the fuel for the plant,” Johari said.
The company would also set up a 1,000 MW power plant in Chattisgarh. “Setting up of mega power projects requires a lot of capital investment. And when you want to pump in Rs 10,000 crore into a company, the IPO route is the best possible option,” Johari said.
Though he did not disclose the amount of funds Bhushan Energy aims to raise through the IPO, he said, “for every 1,000 MW, approximately Rs 4,000 crore of investment is required. We have to see how much we could raise through internal accruals and how much we can source from outside.”
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