Tata Power for 10% equity in Power Trading Corporation

TATA Power is picking up a 10 per cent equity in Power Trading Corporation (PTC), the sole power trading entity in the country. An equity su...

TATA Power is picking up a 10 per cent equity in Power Trading Corporation (PTC), the sole power trading entity in the country. An equity subscription agreement has been signed between the two companies on Tuesday, according to industry sources.

BSES, where Reliance Industries Limited (RIL) is the single largest shareholder, is also in talks with PTC for picking up an equity stake in the trading company.

Sources disclosed that PTC is also planning to raise Rs 25 crore through a public float/private placement. A final decision on this issue would be taken at the company’s forthcoming board meeting, scheduled for this month-end.

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When contacted, CMd of PTC, T. N. Thakur confirmed the move but refused to give any details. ‘‘Discussions are underway with prospective shareholders including FIs, banks and some leading power companies in private and public sectors. I cannot comment beyond this,’’ said Thakur.

PTC, which traded 1.6 billion units of electricity last year, has already done three billion units till December 2002 and is expecting to cross the four billion units mark by this fiscal-end.

This, as per PTC officials, would amount to a turnover of Rs 900 crore as against 365 crore last year. The authorised paid up capital of the company stands at Rs 750 crore.

PTC is also the nodal agency for cross border trade of power and has been trading around 340 MW of surplus power from Bhutan’s Chukka and Kurichhu power projects to various states such as Orissa, Bihar, West Bengal and Jharkhand. Talks are also underway with the Nepal government for a similar power trade across the border.

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As per the business plan prepared by Crisil Advisory Services (CAS), the paid up capital of PTC is to be increased to Rs 100 crore by this year. This will go up to Rs 140 crore by next year, sources said.

‘‘NHPC has recently subscribed to PTC’s equity and accordingly the memorandum of understanding has been amended by the shareholders of the company in their second extraordinary general meeting held last fortnight,’’ sources said.

Presently, the central power utilities—National Thermal Power Corporation (NTPC), Power Grid Corporation of India Limited (PGCIL) and National Hydroelectric Power Corporation (NHPC)—together hold around 32 per cent of the paid up capital of PTC (each of them have subscribed to around 8 per cent equity) and the balance 68 per cent is to be raised from others.

‘‘It is out of this 68 per cent that Tata Power is picking up a 10 per cent equity. Financial institutions and insurance companies such as IDBI, Infrastructure Development Finance Corporation (IDFC), IFCI, GIC and LIC have recently signed a shareholders agreement and have jointly subscribed to about 18.5 per cent equity in the company. A shareholders agreement to this effect has recently been signed between the FIs and PTC,’’ sources said.