PTC finance arm to float, parent’s stake to reduce

PTC India, the leading power trader and energy solutions provider, is planning to expand the capital base of PTC India Financial Services Ltd by issuance of fresh shares through an IPO.

The stake of PTC, which stands at 77.6% in the financing arm, will be reduced to around 60% after the IPO, said Deepak Amitabh, director (finance), PTC India.

“The IPO monies should come into our books by March 2011. The objective of the public issue is to support independent power producer (IPPs) by extending more funds and also help the company borrow more money for the finance arm based on the expanded balance sheet,” Amitabh said.

PTC India Financial Services currently has a networth of Rs650 crore.
Goldman Sachs and Macquarie hold about XXx stake in the company.
The power trading company is hoping to raise about `500 crore through the IPO.

“We have sanctioned about Rs2,000 crore to various IPPs. But, we have disbursed only Rs500-600 crore. The balance funds need to be raised. For this, we need to improve the networth of the finance arm. The IPO will also help us in increasing the ticket size of the loans,” he said.

Following the IPO, the finance arm would tap various sources of debt including external commercial borrowing and domestic bonds.

PTC India was set up in 1999 to support IPPs. It has so far signed power purchase agreements for 15,000 mw.

Of this, about 2,000 mw is available to the company while the balance is in different stages of implementation.

“The power generated in various plants is being sold in a combination of bilateral agreements and through the power trading exchange. The average power tariff is expected to be at about Rs4 a unit at least for the next two to three years at the buyers’ buzz,” he said.

While the projects that have signed PPAs with PTC India are various stages of development, including those trying to close in their finances, Amitabh said the entire capacity that has been signed so far would become available to PTC India by 2013-14.

PTC is also currently participating in setting up three power projects including 1,320 mw unit at Bhavanapadu in Andhra Pradesh, a 1,200 mw unit at Chhattisgarh and another 1,700 mw hydro project at Himachal.