The Hindu Business Line : MahaTransco to seek Govt approval for Rs 1,500-cr IPO

The strategy
The company has a capital expenditure plan of about Rs 20,000 crore for next 5 years.
Maharashtra Govt unable to support such large expansion plan
Taken a cue from successful IPOs of other public sector power companies

Rahul Wadke

Mumbai, Aug. 7 The Maharashtra State Electricity Transmission Company Ltd (MahaTransco) proposes to enter the capital market with an IPO to raise around Rs 1,500 crore.

This will be the first of the three State government power companies going for a public issue.

Mr Subrat Ratho, Managing Director, MahaTransco, told Business Line that the company would soon seek the Government approval for the IPO. Once the Government clearance is in hand, the company would go ahead with formalities including appointment of merchant bankers.

Mr Ratho said a decision on the size and the timing of the IPO is yet to be taken.

But, sources said, the plan is to raise around Rs 1,500 crore through an equity issue latest by the first quarter of next fiscal. MahaTransco was created by unbundling the Maharashtra State Electricity Board on June 5, 2005.

With several new power plants including the ultra mega ones coming up in the State, the company sees good business potential. Sources said that MahaTransco has been toying with the idea for tapping the equity market for sometime now. But it did not go ahead as the market conditions changed in the last six months.

The company has a capital expenditure plan of about Rs 20,000 crore for next five years, Mr Ratho said.

Sources said as the Maharashtra Government is unable to support such large expansion plan, it has taken a cue from successful IPOs of public sector power companies such as NTPC, Power Finance Corporation Ltd and Power Grid Corporation of India Ltd.

Sources said that Maharashtra State Power Generation Co Ltd (Mahagenco) is also planning a similar IPO. Mahagenco is the power generation arm of the Maharashtra Government. When contacted, Mr Ajoy Mehta, Managing Director of Mahagenco, however, said that the company currently has no such plans.

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