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Analyst Meet / AGM - Analyst Meet

Plans to raise equity to meet its enhanced capacity addition targets

Power Grid Corporation

03-Aug-2013, 02:40
Power Grid Corporation held its analyst meet on 2^nd Aug'13, which was addressed by Mr. P Nayak, CMD

Key highlights

For Q1 FY'14, Power Grid reported 23% increase in net sales to Rs 3553.75 crore on y.o.y basis and PAT was up by 19% to Rs 1040.55 crore. Transmission income grew by 22% y.o.y to Rs 3392 crore, consultancy income, including sale of products, grew by 58% to Rs 95crore, while telecom income grew by 35% to Rs 73 crore.

As on July'13, Power grid owns and operates transmission network of about 101350 ckm of transmission lines and 169 EHVAC and HVDC substations having transformation capacity of more than 168000 MVA with availability of its transmission network of more than 99% and it wheels about 50% of total power generated in the country.

Company's monthly billing is about Rs 3142 crore and its realization comes to around Rs 2947 crore ie nearly 94%. As on date, the outstanding is equivalent to less than 1 day's billing.

Management's continuous focus is to reduce the gap between the capex incurred and assets being capitalized. About 40% of the existing asset base of 83550 crore is capitalized in past 27 months.

In terms of consultancy business, 11 new orders came in from 9 clients of which 4 are government orders and rests are private. About Rs 12000 crore worth of project orders are under execution at various stages. Internationally, in consultancy business, company received 3 new orders and increased its reach to 12 countries.

The company has approved the Follow on Public Offer (FPO) of 15% of existing paid up share capital comprising fresh issue of 69,44,58,802 equity shares, for augmenting resources of Company to fund its investment programme. While management reiterated the fact that it kept on saying that it does not require funds, new things came in during Q1 FY'14, which required funds and it was prudent to do it for future sustainable growth.

As per the management, capex target for every year in 12^th 5 year plan is increased from Rs 20000 crore to Rs 22500 crore. In FY'14 till July'13 about Rs 6500 crore is being added so far. Further, green energy corridors have been approved which would require further investments. Also intra state grid projects in Orrisa and Bihar requires about Rs 9000 crore and after the Grid failure that was seen in last year, a dynamic compensation grid failure plan came out which requires another Rs 2500-3000 crore.

As per the management, it had two options, either to grow slowly and don't take new projects, or to receive funds and start bidding for new projects. It went for the later and hence the requirements of funds came in.

For FY'14, management targets to add 12000 GW ckm, 40000 MVA of substations and 4200 MW of inter regional capacities.