Sterlite to invest Rs 40,000 cr in power sector
Sterlite Industries (SIL), a unit of the London-listed Vedanta Resources, plans to invest Rs 40,000 crore in the power sector through its subsidiary, Sterlite Energy (SEL).
By Nevin John, TNN |
MUMBAI: Sterlite Industries (SIL), a unit of the London-listed Vedanta Resources, plans to invest Rs 40,000 crore in the power sector through its subsidiary, Sterlite Energy (SEL), for building coal-based plants of 10,000 megawatt capacity. Sterlite Energy has already bagged a 2,400 MW pithead-project in Orissa and has also signed a memorandum of understanding with the Chhattisgarh government for a couple of other projects, said sources.
Sterlite Energy is also considering listing in India and/or issuance of convertible instruments. “The company will take a decision shortly as it has already bagged a few projects and has been shortlisted for the 4,000 MW ultra mega power project (UMPP) at Krishnapatnam in Andhra Pradesh,” said the sources.
SIL already has a captive generation capacity of 1,350 MW and is adding another 1,400 MW. It has also been allocated coal blocks at Rampia in Orissa, along with five other companies. SEL will get 4.6 million tonnes of coal a year, for 30 years, that will be used to generate 1,000 MW.
The move was expected, said analysts. “Metal companies always have a tendency to venture into power business as their captive consumption is historically high,” said Kamlesh Kotak of Asian Markets Securities.
“Sterlite, which has plans worth Rs 50,000 crore in the metal business, will require uninterrupted supply of power for its aluminium and steel plants. If they develop coal mines also, the company can enjoy the synergy benefit and operational efficiency through the integration of metal, power and coal businesses,” he added.
In its statement to BSE on Wednesday, SIL said the company intends to participate in projects relating to the generation of coal-based thermal power and other ancillary activities.
Sterlite Energy is also considering listing in India and/or issuance of convertible instruments. “The company will take a decision shortly as it has already bagged a few projects and has been shortlisted for the 4,000 MW ultra mega power project (UMPP) at Krishnapatnam in Andhra Pradesh,” said the sources.
SIL already has a captive generation capacity of 1,350 MW and is adding another 1,400 MW. It has also been allocated coal blocks at Rampia in Orissa, along with five other companies. SEL will get 4.6 million tonnes of coal a year, for 30 years, that will be used to generate 1,000 MW.
The move was expected, said analysts. “Metal companies always have a tendency to venture into power business as their captive consumption is historically high,” said Kamlesh Kotak of Asian Markets Securities.
“Sterlite, which has plans worth Rs 50,000 crore in the metal business, will require uninterrupted supply of power for its aluminium and steel plants. If they develop coal mines also, the company can enjoy the synergy benefit and operational efficiency through the integration of metal, power and coal businesses,” he added.
In its statement to BSE on Wednesday, SIL said the company intends to participate in projects relating to the generation of coal-based thermal power and other ancillary activities.
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