Amrit Jal Ventures, the holding company of Hyderabad-based Gati Group's hydel power projects, is looking to divest around 26% stake for raising Rs 200-250 crore. The company is in talks with undisclosed institutional investors, possibly infrastructure private equity funds, who have started due diligence ahead of a potential transaction, said an official close to the company.
The group, with the listed cargo and logistics company Gati Ltd as its flagship, has been diversifying its interests with hydro power identified as a growth area within infrastructure play.
Amrit Jal is implementing three hydel projects in Sikkim with combined output of 250 MW. The holding company is executing the three projects through separate special purpose vehicles (SPVs) and the fund raising will be ploughed into these projects at various stages of implemention. This includes the 99MW project at Chuzachen, 71MW Sadar Mandger project at Ravangla and 51 MW Bhasmey project at Rangpo in Sikkim.
Earlier, Singapore-based River Valley Ventures, had picked up stake in one the SPVs implementing Sada Mandger project, which is nearing commissioning.
Hyderabad-based Capital Fortunes, a financial and project advisory services firm, is advising Amrit Jal on fundraising. It is also an implementation partner to Amrit Jal's power projects.
The overall implementation cost for the three projects is estimated at around Rs 1,700 crore, with each MW capacity costing around Rs 7.5 crore, the official said. "At this stage, we are in serious discussion with an investor, and the stake dilution could be around 26%," he added.
Gati promoters, led by Mahendra Agarwal, hold majority stake in Amrit Jal Ventures Pvt Ltd - which in turn has holdings in Gati Infrastructure, Gati Infrastructure Bhasmey Power and Gati Sada Mandger Power. Gati promoter holding in Amrit Jal is routed through multiple vehicles including the group's listed arm TCI Finance, which has around 38% stake in the power assets.
The share price of Gati was trading at Rs 75 at 1:57 pm today, up by 4.31%. The share price of TCI Finance was at Rs 38.7, up by 1.44%. The company official said, Amrit Jal was also open to acquire hydel power projects in the pre-implementation stage. It has been scouting for buyout opportunities in north Indian states like Himachal Pradesh.
The promoters of Gati are savvy dealmakers, looking to unlock value in their various businesses and infusing more funds. Last month Gati announced its intentions to rope in a strategic or financial partner for its shipping business, which will be in a hived-off entity.
The investor interest in the hydel power space has been rising, and companies like Greenko plc, Bhilwara Energy and Soham Renewable have raised multiple rounds of private equity funding. Many players are also developing a bouquet of power assets, where hydel figures as a prominent category.