Power Grid On An Investment Spree, Aims At Strengthening And Upgrading Transmission Segment
Biswajit Yadav / 24 Jun 2014
Power Grid Corporation in their board of directors meet has approved to invest around Rs 61000 crore in the next three financial years, for which the funds will be raised from different sources. By doing so, the company aims at strengthening the transmission corridor at Chhattisgarh and will also upgrade the transmission systems associated with the Lara thermal power project of the company.
Power Grid Corporation, a Navratna company is engaged in the business of transmission of electric power across the country. It is also engaged in the business of consultancy services and telecom services. But the major chunk of income for the company comes from the transmission segment which comprises around 93% of the total income.
Yesterday (23-06-2014) the board of directors of the company approved to invest around Rs 5151.37 crore for strengthening the transmission corridor for independent power producers in Chhattisgarh. They also approved investment for up-gradation of the transmission system associated with Lara thermal power project of NTPC at an estimated cost of Rs 400 crore.
The company has intended to invest around Rs 61000 crore in country in the next three financial years and for this the funds will be raised from different sources. Of the total amount required, the company may raise around Rs 37641 crore through issuing bonds or debentures while around Rs 7770 crore will be raised through multilateral funding or external commercial borrowings and the rest will be raised from equity. So from this we can say that the company will raise major chunk of its funds required from the bond and debentures.
While looking at the balance sheet of the company, the company already has a total debt of Rs 80472 crore for the fiscal year 2014, which makes the debt equity ratio to stand at 2.32%. Now if the company raises the above mentioned funds, the total debt of the company will stand at Rs 125883 crore, which will make the new debt to equity ratio to 2.5%.
As of May 2014, the company has total 108128 ckm (circuit kilometre) of transmission lines along with 185 sub stations with transmission capacity of more than 206953 MVA (mega volt ampere). The company also maintained its average availability of transmission system at 99%. On the valuation front, the scrip of the company is trading at a price to earnings (P/E) of 14x.
Today the scrip opened at Rs 132.5 on BSE and currently it is trading at Rs 132.3, up by 0.49% from its previous close.
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