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Essar Power (EPL) plans to sell 10 per cent stake to private equity firms to raise up to $700 million, valuing the company at $7 billion, reports The Economic Times. The company has reportedly given mandate to IDFC-owned SSKI to raise the capital.
Essar Power operates power plants with a capacity of 1,200 MW. It has apparently drawn up an investment plan of over $4 billion to set up three more projects with cumulative capacity of 3,600 MW, the report adds. The projects are coming up in Gujarat, Madhya Pradesh and Jharkhand. They will be funded on a debt-equity of 3:1.
It remains to be seen who will be interested in funding mega power projects. Bhilwara Energy is in the market to raise $250 million for funding their mini power projects. Several funds have committed billions of dollars for funding Indian infrastructure development. 3i India Infrastructure Fund has a $500 million corpus currently, while the Tatas and ICICI Bank have also announced multi-billion dollar funds for investing in core sectors.