Lanco Infratech Ltd, which is setting up additional power generation capacity of 6,000 MW with a capex of Rs 30,000 crore, is close to divesting part stake through private equity deals at the holding company level, verticals and special purpose vehicles to part fund the growth equity requirement.

The diversified infrastructure company, which has restructured its operations along verticals and consolidated its power business into a separate vertical, is likely to spin off the power business as a separate entity in due course.

“We have tied up debt component for expansion projects. As the company accesses these funds, we would require equity infusion. To meet this requirement, we are set to raise funds through private equity deals. Several global PE firms have evinced interest in being part of the growth plans,” Mr. L. Madhusudhan Rao, Executive Chairman of Lanco Infratech, said.

Speaking on the sidelines of the company's 18th AGM, Mr Rao told Business Line that “valuations are now under way. It would be difficult to comment on the quantum of equity dilution that is likely at various levels within the company.

"But we expect to close some deals before the year-end. We are at advanced stage of implementation of several projects. The promoters hold 69 per cent. The stake divestment will help infuse the money as growth capital,” he explained.

Power capacity

The current installed capacity of 3,292 MW is expected to touch 4,700 MW by March. The addition of new power generation capacities and two tollways would add to cash flows significantly. He said that the company was looking at high double digit growth.

“Gas supply continues to be a constraint. Even though Lanco can add 484 MW at Kondapalli expansion, we cannot do so due to shortage. If we import LNG, it works out to about Rs 5 per unit. It is for the Government to take a call due to power shortage,” he said.

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