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Pratim Ranjan Bose

Kolkata, June 5 The board of directors of Damodar Valley Corporation (DVC) may consider the KPMG recommendations on organisational restructuring and IPO soon.

DVC will approach the Centre for a formal clearance in this regard once board approves the proposals.

DVC have entered into a handholding relationship till IPO with KPMG in January this year. As the first step towards the IPO, the consultancy firm has recently submitted its report recommending ways to restructure the organisation without requiring any amendment of the DVC Act.

It may be mentioned that the Union Minister of State for Power has recently said that considering the statutory status of DVC, the organisation may tap the capital market only through an SPV or a wholly owned subsidiary. The Minister was hopeful that the restructuring would be through in end 2008.

While the details of the KPMG recommendations are not known, sources say that the corporation may leave the existing power generation assets, including the projects lined up for implementation in the Eleventh Plan period with DVC and set up all the future projects through the SPV or subsidiary company which will eventually hit the capital market.

Having a generating capacity of 2210 MW till 2006-07, DVC has already added approximately 1000 MW fresh capacity taking the total to 3210 MW. This includes approximately 80 MW of hydro-electric capacity.

The corporation is currently in different phases of implementation of 5 more projects to add 4800 MW capacity through either expansion of the existing thermal plants or setting up greenfield projects (at Durgapur and Ragunathpur in West Bengal and Kodarma in Jharkhand). It has announced financial closure of almost all the proposed projects linked slated to be commissioned by 2010-11.

DVC is also partnering with Tata Power and SAIL for adding 1500 MW thermal capacity in the region.

More Stories on : IPOs | Restructuring | Power | Consulting

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