QUANTUM Fund, the investment vehicle of billionaire investor George Soros, has picked up close to 2% stake in power and infrastructure company GVK Power & Infrastructure for around Rs 35 crore. The investment has come at a time when many US-based investors have been on a selling spree amid concerns over acute financial crisis in the world’s largest economy.
The GVK group is a diversified business entity with focus on infrastructure projects, specially in urban areas. It has a significant presence in the hospitality, services and manufacturing sectors. On Monday, GVK Power shares were up by 13% to close at Rs 20.66 per share on the Bombay Stock Exchange .
Recently, GVK Power & Infrastructure said it plans to sell 20% of its electricity business to fund expansion plans. The New Delhi-based company is in talks with Standard Chartered Bank, Merrill Lynch and Cityspring Infrastructure Trust, a unit of Singapore’s Temasek Holdings, for the stake sale.
GVK Power and Infrastructure has initiated power projects that will have an operational capacity of over 2000 mw. While Jegurupadu Combined Cycle Power Plant is operational, several other power projects are being developed. GVK’s power projects are based on coal, gas and hydel resources. The projects are spread across several states in the country including Andhra Pradesh, Punjab and Uttarakhand. At present, Indian power producers are expanding capacity to meet the country’s rising demands. India needs to spend $100 billion every year until 2012 for adding capacity to beat peak hour shortage of 15%. The company may consider listing its electricity business, analysts tracking the company said.
A McKinsey report estimates that India’s electricity demand may triple to 3,35,000 mw by 2017 if the current growth rate is maintained. The country needs to add around 40,000 mw annually to meet the predicted demand, which exceeds current estimates by 1,00,000 mw, the report said.
Quantum Fund has bought stake in GVK Power for around Rs 35 crore
GVK Power scrip rose 13% on deal news on Monday
The company plans to sell 20% of electricity biz to meet its expansion plans