Power trader PTC India is talking to private equity firms to dilute stake in its unit PTC India Financial Services, before going in for an initial public offer some time this year, a top official said.
It expects to meet the capital needs of the financial services unit, pegged at 57 billion rupees, via the sale, IPO and other means, chairman and managing director T.N.Thakur said on Tuesday.
"They require 5,700 crores, and they will raise it through IPO and pre-IPO. The IPO would be definitely in this financial year. I would like to bring it in the calendar year (if possible)."
PTC India Financial Services has sanctioned debt worth 19.53 billion rupees to be lent to power projects with 8,500 MW capacity, and also picked up equity worth 3.98 billion rupees in 2,600 MW projects till June 30, a company statement said.
Indian infrastructure projects including power plants have become a major driving force for the $100 billion global project finance market in the first half of the financial year and domestic as well as global finance firms vying for a share of this market.
Goldman Sachs Strategic Investments and Macquarie India Holdings hold 11.2 percent in PTC India Financial Services, while rest is held by its parent, the company website showed.
PTC India, which earns major revenue from the margins it earns on power trades, expects growth in volumes of power traded in the country, boosting its revenue prospects in FY11, Thakur said.
The firm, that has 43 percent share of the country's power trade market, recorded a 36.7 percent increase in its trading volume during April-June quarter at 5,747 million units, the firm said.
"At present margins are at 5.5 paise per unit...CERC has allowed PTC to charge 7 paise per unit, we will gradually increase it except for Bhutan (projects)."
Indian government has mandated PTC India -- 16 percent owned by state-run utilities NTPC, NHPC, Power Grid and Power Finance Corp -- to trade with neighbouring countries Bhutan and Nepal.
The firm recently got an letter of intent from a Karnataka utility to supply 1,380 MW for 25 years, and it will bid for supply agreements in the states of Uttar Pradesh and Andhra Pradesh, he added.
It reported a 16.6 percent drop in April-June net profit to 278 million rupees, on net sales of 27.57 billion rupees. The net profit declined on lower treasury income and higher tax outgo, Thakur said.
At 2:30 p.m., shares in PTC India were trading up 2.13 percent at 107.85 rupees in a Mumbai market that was up 0.19 percent. So far this year shares in the firm, which is valued by the market at $666.04 million, lost 4.34 percent.