Adani Power mulls demerger of transmission line business

3i-backed thermal power producer Adani Power Ltd is looking to demerge transmission line business of the company, as per a stock market disclosure. The company’s board is meeting later this week to consider the proposal.

Ahmedabad-based Adani Power has two business lines including power generation and transmission. Transmission is a small segment for the firm and generated revenue of less than Rs 100 crore in FY13.

Together with its subsidiaries, the firm is currently developing various power projects with a combined installed capacity of 9,240 MW, out of which 5,940 MW is operational, 3,300 MW is under implementation. It has completed implementation of transmission line projects of about 1,600 km length.

Private equity firm 3i holds 5.6 per cent stake in the public listed firm. Its investments in the company is underwater and has lost one third of its original value.

Early this year, after stopping fresh private equity and buyout investments in India, 3i Group plc said it is pausing infrastructure investments in the country. London-listed 3i Infrastructure, an affiliate of the 3i Group plc and anchor investor in the 3i India Infrastructure Fund, said that it would make no new investments in India.

3i India Infrastructure Fund, which raised $1.2 billion corpus in 2008, completed its investment period in November 2012. 3i Group was in the market to raise a second India infrastructure fund, but now has called that off.

In February 2013, the PE firm saw the departure of its managing partner Anil Ahuja and partner Girish Baliga. Interestingly, both of them looked after the infra fund. The UK-based PE firm had named Samir Palod as managing director and country head. The PE firm is now looking to manage and exit its investments in the coming years.

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