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Macquarie SBI Infra Fund To Invest Rs 125Cr In Adhunik Power

09 August, 2010

Adhunik Metaliks Limited, a leading producer of speciality alloy steel, signed definitive agreements with Macquarie SBI Infrastructure Investments Pte Ltd (Macquarie SBI) and State Bank of India (SBI) for investment of Rs 125 crore in its power subsidiary Adhunik Power & Natural Resources Limited. The shares of Adhunik Metaliks went up by 1.8% to close at Rs 113.4 in BSE on Monday.

The fund is meant for part financing the equity of its ongoing 540 MW coal-based independent power project at Jamshedpur, Jharkhand. The project cost is Rs 2,650 crore and is being funded through a debt-equity mix of 3:1.

The debt requirement of Rs 1,987 crore has been tied up with a consortium of commercial banks led by SBI and includes institutions like LIC. The investment by Macquarie SBI and SBI will meet the balance of the project’s total equity requirement of Rs 663 crore. India Infrastructure Fund, managed by IDFC Project Equity Company Limited, had committed to invest Rs 250 crore in the equity of the project in December 2009. The project implementation is in full swing and it is likely to commence generation of power from January 2012 onwards, stated a company release.

Manoj Kumar Agarwal, managing director, Adhunik Metaliks Limited said, “The company is marching towards being one of the major independent power producers and investments by reputed investors like Macquarie, SBI and IDFC are testimony of their confidence in our vision and capabilities.”

Varun Bajpai, CEO, Macquarie SBI, commented, “We are very pleased that this investment has been secured by our fund alongside such high quality promoters and in a growing sector. We expect this investment to be one of a number of investments that our fund will complete in the near future”.

The Adhunik Metaliks Ltd stock was trading at Rs.113.80, up by Rs.2.40 or 2.15%. The stock hit an intraday high of Rs.115.30 and low of Rs.111.50.

Adhunik Metals Ltd has an integrated steel plant of 0.45 mmt capacity in Rourkela, Orissa. In May, Orissa Manganese and minerals Limited, the wholly subsidiary of Adhunik Metaliks Limited, has entered into an exclusive raising contract with the mine owner of Sulepat Iron Ore Mine. It had also entered into 50:50 joint venture agreement for the ownership and management of the said mine which is subject to the approval of relevant authorities. For FY10, Adhunik Metaliks posted a consolidated net sales at Rs 443 crore, up by 54%, while net profit went up 198% at Rs 137 crore.

In June 2010, Tata Power, India’s largest private power producer, sold 14-15% stake in its two coal SPVs –Bhira Investments and Bhivpuri Investments, to the private equity firm Olympus Capital Holdings Asia for $300 million. These two coal SPVs together hold 30 per cent stake in Tata Power’s two Indonesian coal mines–KPC and Arutmin.

Similarly, a group of PE investors including Morgan Stanley’s infrastructure arm, Goldman Sachs, Norwest Venture Partners, Everstone Capital and PTC India Financial Services and General Atlantic had invested $425 million in Asian Genco Pte Ltd, which has stakes in power generation assets in India in March 2010.


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Macquarie SBI Infra Fund To Invest Rs 125Cr In Adhunik Power

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