PTC India Financial Services , a unit of the country's largest listed power trader PTC India, plans to sell its investment in a power project by Ind-Barath, besides selling part of its stake in Indian Energy Exchange (IEX) this fiscal, a top official said.
“As per contractual terms, buyback of shares by Ind-Barath in a thermal power project based in south India may take place,” Ashok Haldia, director on the board of the power sector lender told Reuters in a telephonic interview on Friday.
“We invested about 55 crores (550 million rupees) in August, 2008 (in Ind-Barath project), and the exit is likely to be in August or September.”
The New Delhi-based financial services firm, in which Macquarie holds 3.46 percent stake and HSBC owns 3.68 percent, expects to earn a post-tax return of 23.75 percent per annum on exiting the Ind-Barath project, he added.
The firm may also divest part of its 21 percent holding in IEX – promoted by Financial Technologies Ltd – this year, Haldia said, but declined to reveal the quantum or timing of the proposed divestment.
It had divested 5 percent in IEX – whose other investors include Adani Enterprises , Reliance Infrastructure, Lanco Infratech , Tata Power and Rural Electrification Corp – last year at a premium of 108 rupees a share, he said.
Private Equity firms exited investments in 14 companies during Jan-March quarter, compared to 34 exits in the same period in 2010, data from Venture Intelligence, a monitoring agency which tracks private equity deals, showed.
PTC India Financial has so far taken equity stakes in various energy projects worth about 4.6 billion rupees, while it has committed 5.6 billion rupees as equity capital to 8 projects, said Haldia adding that the criteria to exit such investment is 18-21 percent internal rate of return (IRR).
“We are exclusively devoted to private power projects…and projects in related areas. We also participate in the equity and debt programs for the power projects and also in carbon finance.”
The firm that raised 4.4 billion rupees via IPO in March has sanctioned projects worth about 35 billion rupees so far, disbursed debt of about 10 billion rupees and have a carbon finance exposure of close to 300 million rupees.
“We had sanctioned projects worth about 1,700 crores (17 billion rupees) last year … We expect a significant increase in the sanctions,” for the fiscal year ending March 2012, he said, but declined to put any number on it.
The firm is authorised to raise more than 1 billion rupees via tax-free infrastructure bonds this fiscal and would take a call on the quantum and timing for the issuance of these bonds based on the interest rate scenario and demand, he said.
India's central bank last month raised interest rates the 10th time in just over a year to combat stubbornly high inflation and signalled more increases to come even as growth in Asia's third-largest economy is slowing down.
Haldia, however, is confident of cutting its average borrowing costs further this fiscal from 10.45 percent in FY11 as it already has in place $76 million loan from International Finance Corp and German lender DEG for disbursal and plans to raise funds via tax-free bonds.
“Despite the rising interest rates, we expect the average borrowing cost to go down in FY12 as well.”
The company's shares are down more than a third since they listed on March 30 at a price of 26.75 rupees on NSE. At 2:16 p.m. shares in PTC India Fin Serv were down 0.28 percent at 17.50 rupees in a Mumbai market that was down 0.44 percent.
Source: Economic Times