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Lanco Infratech surges on completing Udupi Power Plant sale with Adani Power

21 Apr 2015 Evaluate

Lanco Infratech is currently trading at Rs. 5.56, up by 0.27 points or 5.10% from its previous closing of Rs. 5.29 on the BSE.

The scrip opened at Rs. 5.60 and has touched a high and low of Rs. 5.80 and Rs. 5.50 respectively. So far 456532 shares were traded on the counter.

The BSE group 'B' stock of face value Rs. 1 has touched a 52 week high of Rs. 14.94 on 23-May-2014 and a 52 week low of Rs. 4.45 on 25-Mar-2015.

Last one week high and low of the scrip stood at Rs. 5.92 and Rs. 5.25 respectively. The current market cap of the company is Rs. 1383.86 crore.

The promoters holding in the company stood at 68.58% while Institutions and Non-Institutions held 5.66% and 25.75% respectively.

Lanco Infratech (LITL), the leading integrated infrastructure player in the country having business verticals in EPC, power, solar, natural resources and infrastructure, has successfully completed the sell-off of its Udupi power plant to Adani Power, making it the largest acquisition in India in the thermal power space. This transaction is as part of Lanco’s debt restructuring strategy.

Udupi has set up 2 X 600 MW imported coal based power project in the Udupi District in the state of Karnataka. It is the country’s first independent power project that is based on 100 per cent imported coal with a captive jetty of 4 million tonnes per annum and an external coal handling system in the new Mangalore Port Trust. The plant’s facility can be expanded as Udupi has already signed an agreement with the Karnataka Government for further expansion of the capacity by 1,320 MW.

Following the completion of the transaction, Lanco Infratech has realized the enterprise value of around Rs 6,300 crore by reducing long term debt and realizing its equity value. The deal helped Lanco to reduce its debt position - long-term and short term debt now at Rs 4,275 crore and Rs 2,147 crore respectively - and boost cash flow keeping in mind the initiatives being taken and the plans being charted out by the new government in order to revive the distraught power sector.

Currently, Lanco has 3450 MW assets operating in various states in the country and 4636 MW is under construction at various stages. They have around 7,000 MW capacities under development and some of these assets have coal blocks and 100 per cent regulated tariff. LITL has laid out a plan whereby it will look at more such strategic sell-offs like Udupi to streamline its operations and strengthen the core of its business.

 

 

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