Indian Oil Corporation (IOC) on Friday said it would make an investment of about Rs.900 crore to pick up a 26 per cent stake in Nuclear Power Corporation of India's (NPCIL) 1,400-MWe atomic power project at Kota in Rajasthan, giving shape to its nuclear venture.
“We would join NPCIL by picking up 26 per cent equity for Rs.900 crore in its 1,400-MWe Kota atomic plant,'' IOC Chairman and Managing Director B. M. Bansal told reporters here on the sidelines of the Bio Fuel Conference here.
NPCIL is in the process of setting up a 1,400-MWe (2 x 700 MWe) nuclear plant at Kota which is scheduled for completion by 2015-16. “The joint venture agreement would be signed in a month,'' Mr. Bansal added.
Debt equity ratio
IOC will hold 26 per cent equity in the project, which is proposed to be financed by both partners in the debt equity ratio of 70:30. The company has already made known its intention to make foray into the power sector in a big way.
Meanwhile, IOC is geared up for its follow-on public offer in January, through which it expects to raise about Rs.20,000 crore.
The government plans to offload 10 per cent of its equity holding in IOC through the FPO and an equal stake would be diluted by the PSU company.
Following the stake sale, the government's holding in IOC would reduce to 64.57 per cent from the existing 78.92 per cent. IOC has hired six investment banks — Merrill Lynch, Citigroup, ICICI Securities, Morgan Stanley, SBI Capital and UBS — to manage the public offer.
“The FPO could be expected in the third or fourth week of January,'' Mr. Bansal said.
