The Blackstone Group is investing Rs 500 crore or $111 million in VISA Power Ltd, an independent power producer which is a part of the $1.1 billion Kolkata-based Visa Group. The deal will take the private equity giant’s direct exposure to the Indian power sector to Rs 2,125 crore or $471 million.
Last year, Blackstone had pumped $300 million in Moser Baer Projects Pvt Ltd, which plans to commission 5,000 MW by 2016. It also invested $60 million in Monnet Power Company Ltd, a subsidiary of Monnet Ispat, which is developing a 1,050 MW coal-fired power plant in Orissa.
Recently, it has also taken an exposure on parent firm Monnet Ispat, picking 3.89 per cent stake from the market for Rs 125 crore.
Earlier this month, Blackstone also invested Rs 150 crore ($33 million) in FINO Ltd (which provides technology solutions for banks and microfinance institutions) and concluded a Rs 225 crore deal with a privately held promoter group firm of the media company Jagran Prakashan Ltd.
Visa Power’s core asset is a 1,200 MW captive-mine-based, coal-fired power plant in Chhattisgarh, which has already secured the required land, water allotment and other necessary approvals. Financial closure for the first 600 MW unit is complete while the second unit is in an advanced stage of completion. It has placed orders for BTG on BHEL and for BOP on Larsen & Toubro. This plant has been allotted 22 per cent of the coal from the Fatehpur East coal block and is scheduled to be commissioned in 2013-14.
VISA Power is also developing units for generating another 6,600 MW, including a 1,320 MW coal-based super critical power plant in Orissa (which is also in an advanced stage of development) and other power projects in Madhya Pradesh, Jharkhand and Gujarat.
JM Financial Consultants was the financial advisor on this transaction.
The VISA Group, established by former Tata Steel executive Vishambhar Saran, has business interests in steel, power, mining, international trading, shipping and logistics.
“The power sector in India is going through an exciting phase of growth, which is critical to sustain the country’s high levels of economic and industrial growth and unlock India’s economic potential. We are glad that Blackstone shares our vision. Together, we can create a leading power company,” said Vishambhar Saran, the founder & chairman of the VISA Group and the chairman of VISA Power.
“Investing in the development of infrastructure in India has long been a theme of ours at Blackstone. India needs an investment of $200 billion in the power sector, of which $50 billion is required in equity, if the country is to continue its rapid economic growth,” said Akhil Gupta, chairman and managing director of Blackstone Advisors India Pvt Ltd. “We believe that VISA Power’s core Chhattisgarh plant, with its captive mine, will have a very competitive cost of generation, and will be among the better-positioned IPPs in the country,” he added.