There has been an increased interest in projects in the Indian power sector with international companies acquiring stakes in power projects in the country, reports Pallavi Ail in Mumbai. In some instances promoters have sold assets with a view to servicing their loan obligations. The sale of
two hydro power projects by the Jaypee Group is a case in point.
“Banks have managed to convince the promoter to sell two profitable hydro power plants,” a Standard Chartered report said.
“In the case of Jai Prakash Power, the promoters have pledged 97% of their equity in the company to lenders giving lenders a big say in the resolution of debt related issues,” they added.
The thermal power sector is among the most stressed sector, because of low availability of coal — which attracts fewer prospective buyers.
India's biggest electricity generator, NTPC, recently invited expressions of interest from state electricity boards and private companies as it looks to buy coal-based power plants in India and overseas to increase power generating capacity through acquisitions.
“Given its free cash, it could buy at best 2-3 such plants. Any acquisition of a private thermal plant by NTPC can only happen after the elections given that NTPC is state owned,” SC analysts said.