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Lanco eyes Rs 8,000 cr turnover

Lanco Group plans to consolidate all its businesses in power, realty and construction into one holding company.

india Updated: May 31, 2006 13:17 IST

In a major restructuring drive, Hyderabad-based Lanco Group has decided to consolidate all its businesses in power, realty and construction into one holding company even as it eyes a more than six-fold jump in revenues to Rs 8,000 crore by 2010.

The Group has also charted out big expansion plans in power sector involving a capex of Rs 13,000 crore in the next four years to ramp up generation capacity by 2,500 MW.

"We are consolidating all our 14 subsidiaries in power, construction and realty sectors into one holding company - Lanco Infratech Ltd," Lanco Group Chairman L Madhusudhan Rao said.

The promoters would hold about 90 per cent in the new company, he said, adding the process of restructuring was on and would be completed shortly.

This is in line with the group's objective of achieving a revenue of Rs 8,000 crore by 2010 from about Rs 1,200 crore at present, he said, adding the asset base is also expected to increase to Rs 25,000 crore from just Rs 2,200 crore now.

The company is also planning to bring strategic partners in both the holding company as well as subsidiaries.

"For bringing strategic partners in our holding company we are talking to investment bankers," he said, adding that not more than 10 per cent would be offloaded in holding company.

On expansion in the power sector, he said the group would be adding 2,500 MW to take its total generation capacity to 3,000 MW by 2010.

Elaborating, Rao said 1,600 MW would be through coal-based plants while the remaining 900 MW is hydropower projects. The investment would be made on a debt-equity ratio of 75:25.

The hydro-power projects include 510 MW in Sikkim, 200 MW in Himachal Pradesh and 70 MW in Uttaranchal.

The financial closure of Chhattisgarh project would be completed by December this year, while that of Karnataka project would be over by September, Rao said.

The company was yet to tie up for debt in the Sikkim project. Lanco Group is also planning to bid in ultra-mega power projects in Madhya Pradesh and Gujarat.

"We are bidding for ultra-mega power projects in partnership with a Globaleq of UK," he said.

The group also plans to participate in transmission and distribution of power.

First Published: May 31, 2006 13:17 IST