Damodar Valley Corporation (DVC) is planning to take the subsidiary route to hit the capital markets later this year. DVC has appointed consultancy firm KPMG to carry out a study, which is due to be tabled in May this year, following which the company will chalk out the details of the proposed IPO.
Minister of state for Power Jairam Ramesh said that since DVC is a statutory organisation, it couldn’t raise money from public on its own. Therefore, DVC has decided to float a subsidiary but whether it will be a separate special purpose vehicle (SPV) or a DVC umbrella organisation that will raise the money, is yet to decided.
Ramesh also lambasted DVC for being an under-achiever in its 60 years of existence. He said that the corporation had been able to put up an installed capacity of only 2400 MW in the last 60 years but this is due to change with DVC taking up a huge expansion plan. DVC would ramp up the installed capacity from 2400 MW to 11,000 MW within four years. This will make it the second largest power generating company in India after NTPC by 2012.
For this, DVC had already placed order with state-owned Bharat Heavy Electricals Ltd (BHEL) for supply of equipment. DVC's expansion would take place at its units in West Bengal and Jharkhand.
On May 15, a 250-MW unit would be commissioned at Mejia. Two units each of 250 MW would also be commissioned at Chandrapura in August and December this year, he said. DVC's capital requirement would be around Rs 40,000 crore for ramping up capacity. Internal accruals and borrowings would be the main sources of funds for DVC, he said.