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Tata Power likely to sell non-core assets for funding

03 Oct 2011 Evaluate

Tata Power, the leading power generator aims to raise funds by offloading a minority stake in core investments as well as the sale of non-core investments. The company plans to finance its future projects with these funds. For raising funds the company will also look at various other avenues, including the overseas bond market, external commercial borrowings (ECB) and the rupee loan/bond market.

The company eyes to raise low cost funds, while maintaining leverage ratios at target levels. The source of equity for funding future projects will include the sale of non-core investments, a minority stake sale in core investments and equity infusion at the parent level.

Currently, Tata Power has an operational capacity of 3,701 MW. This includes 2,974 MW (thermal), 447 MW (hydro) and 277 MW (wind). About 4,826 MW capacity is under execution.

The company’s net profit after tax and appropriation for the quarter ended June 30, 2011 rose by 2.55% at Rs 269.69 crore as compared to Rs 262.98 crore for the corresponding quarter last year. Its total income increased 8.69% at Rs 2168.82 crore for the quarter under review from Rs 1995.44 crore for the same quarter last year.

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