TATA Power brings in fresh power through new set of lenders

TATA Power informed stock exchanges on Tuesday that its 100 per cent subsidiary Coastal Gujarat Power Ltd.(CGPL) has refinanced its outstanding rupee loans. The refinancing is of Rs 3864 crores for its 4000-MW Mundra ultra mega power project (UMPP) in Kutch district of Gujarat which is being implemented by CGPL.

The refinancing has been carried out following a RBI circular dated 7th August 2014 by which a minimum of 25 per cent of the outstanding loans has to be refinanced through new lenders. Axis Bank has joined as a new lender to the existing rupee lenders consortium, pursuant to the refinancing exercise, in line with the existing regulations.

The refinancing scheme will help in extending the tenure of the rupee facility and also help in reducing the interest cost of CGPL. The total interest savings will be 2 per cent i.e Rs 77 crore per annum on Rs 3,864 crore of refinancing. The consortium is led by the State Bank of India. The consortium also includes Infrastructure Finance Company, Oriental Bank of Commerce, Vijaya Bank, State Bank of Hyderabad, State Bank of Bikaner, State Bank of Travancore, and Axis Bank.

On the financial front, TATA Power's operating revenue decreased by 3.60 per cent to Rs 34367 crores in FY15 from Rs 35649 crores in FY14. The EBITDA of the company stands at Rs 6940 crores in FY15, an increase of 0.33 per cent from Rs 6917 crores in FY14. The EBITDA margin of the company increased from 19.40 per cent in FY14 to 20.20 per cent in FY15. The net profit stands at Rs 409 crores in FY15. The company faced a loss in FY14. Total debt of the company stood at Rs 37205 crores for FY15 an increase of 5.76 per cent from FY14. The debt burden of the company stood at 49 per cent of total assets.

The refinancing of Mundra project will help the TATA Power to reduce part of debt and improve financials. The share price of the company closed at Rs 67.90. An increase of 1.12 per cent from the previous close.

Tata Power operates in the power generation segment. The Company and its subsidiaries have an installed gross generation capacity of 8,750 megawatts in India. Its power segment consists of generation, transmission and distribution of electricity. Its presence in various segments of the power sector includes fuel security and logistics, generation (thermal, hydro, solar and wind), transmission, and distribution and trading.