Apraava Energy plans to double its investment in India, go public and look for greenfield acquisition, according to Managing Director Rajiv Ranjan Mishra.
"The company is looking at annual investments of Rs 5,000-6,000 crore over the next three years,” Mishra told BQ Prime. The aim is to double investments in India to Rs 36,000 crore from the earlier investment of Rs 18,000 crore so far, he said.
The power producer's investment will be funded by 70% to 80% debt and the balance through equity. "The cash that we generate and the debt we can raise should be enough to fund our investment,” Mishra said. “We have two shareholders who can support us by injecting more cash, if required.”
Apraava Energy is jointly owned by Hong Kong-based CLP (formerly known as China Light & Power) Group and the Canadian pension fund CDPQ.
CDPQ on Tuesday increased its stake in Apraava from 40% to 50% by investing Rs 660 crore. The remaining 50% is held by Apraava's Hong Kong-based parent company, CLP Holdings.
That would allow the company to grow faster as it is not limited by its debt, Mishra said. Earlier, the debt of the company was consolidated on the books of CLP Holding.
The company's aim is to become a large and diversified power-company, rather than a small listed player, Mishra said. "We want to present a certain value to the customer by doubling our size and diversifying our cash stream.”
“If we do a gigawatt equivalent investment every year for the next three or four years, then, we will achieve the size and the diversity of cash flows that are required for a successful listing," he said.
However, market conditions, too, will be looked at before announcing the IPO, he said.
The company may also consider an acquisition to scale up its targeted energy portfolio. "We have already made acquisitions in the transmission and renewables space in the recent past,” Mishra said. “In the near future, we will have a combination of greenfield acquisitions."
Apraava has 3,150 megawatts of installed capacity, including 1,340 MW of thermal power capacity in Jhajjar Haryana, 924 MW of wind and 250 MW of solar energy projects across seven states, as well as two power transmission assets. In addition, the company is currently constructing a 251-MW wind farm in Gujarat.
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