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IL&FS Private Equity-backed infrastructure firm Gayatri Projects is planning to invest up to Rs 1,000 crore in the power generation business run by Nagarjuna Construction and is looking to raise as much as Rs 400 crore through a rights issue to build its resources. The company, that also has private investment from ChrysCapital’s chief Ashish Dhawan, has a board meeting scheduled for Friday to discuss these proposals.

Gayatri Projects is already reported to be a partner of Nagarjuna Construction (backed by Blackstone and Rakesh Jhunjhunwala) in Nelcast Energy Corporation Limited. Nagarjuna Construction’s energy arm NCC Power Projects Ltd had on Tuesday disclosed it has acquired 55% in Nelcast Energy. This deal was pegged around Rs 150 crore. Gayatri Projects owns the balance 45% making it a joint venture power firm.

Formely an associate company of iron castings firm Nelcast Ltd, Nelcast Energy is developing a 1,320 MW thermal power project at Krishnapatnam in Andhra Pradesh. The project, which will be fed by imported coal, is estimated to cost Rs 6,822 crore.

Gayatri Projects has said it will invest Rs 1,000 crore in NCC Power Projects or its associates/subsidiaries through its own arm GEVPL. NCC Power Projects is at present a wholly owned subsidiary of Nagarjuna Construction. It is developing thermal power project with capacity of 2,640 MW in Andhra Pradesh. 

Separately, the company is also going to raise upto Rs 400 crore through a rights issue. It will also reserve a certain portion of shares for its existing FCCB holders that will be above the issue size. 

IL&FS PE owned 5.16% and Ashish Dhawan held 2.75% stake in Gayatri Projects as of September 30. It remains to be seen if they subscribe to fresh shares to maintain their holding or decide to stay put and indirectly dilute their percentage holdings.

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