Blackstone to invest up to $65m in Gupta Coal

NEW DELHI: US-based Private equity major Blackstone Group is close to investing nearly $60-65 million in Nagpur-based Gupta Coal. The company, which has a chain of coal washeries across the country, will dilute 20% of its equity to raise funds.

This will be Blackstone’s second investment out of its $1 billion India fund. Earlier in the year, Blackstone had invested $50 million in Pune-based Emcure Pharmaceuticals.

Gupta Coal is in a major expansion mode. It is expanding its capacity of its washeries from the present 27 million tonnes to 200 million tonnes over the next six months. Gupta Coal is also ramping up its coal mining business and is close to acquiring a coal mine in Australia for a consideration of $45-55 million.

It recently bought a coal mine in Indonesia for a consideration of $10 million. The company is also planning to hit the capital market over the next 15 months with an IPO.

Blackstone India senior MD and chairman Akhil Gupta told ET: “It is not our policy to comment on speculation.” Gupta Coal chairman Padmesh Gupta declined to comment on the investment move. Sources confirmed that the company was in talks with a few private equity players for dilution of 15-20% stake.

Gupta Coal India is the parent company of Gupta Coal and Gupta Coalfields and Washeries and is valued at Rs 1,100-1,300 crore. The company has also entered into coal mining in Indonesia through long term strategic tie-ups.

The company has nine coal washeries in Maharashtra, Andhra Pradesh, Chhattisgarh and Madhya Pradesh meeting washed coal requirements of the power, cement and steel sector.

It also has a tie-up with Star Petro Energy (an ETA Group Company) for long term supply of imported coal to State Electricity Boards. The company imports coal from China, Indonesia, Australia and South Africa.

Gupta Coal is also in power generation in association with Tata and is looking to enter non-conventional sources like biomass and wind.