Tata Power plans to raise Rs 5,500 crore

Tata Power plans to raise Rs 5,500 crore during through non-convertible debentures (NCDs) and bonds.

The company will be seeking shareholders' nod for the same on Friday during its annual general meeting scheduled in Mumbai.

The agenda to opt for 'private placement of non-convertible debentures/bonds' will be put to vote on Friday.

"The company estimates to borrow around Rs 5,500 crore within 12 months from the date of passing of this resolution, which would be utilised for bond/loans which are re-payable in next 12 months including the loans taken for acquisition of Walwhan Renewable Energy Ltd," read Tata Power's annual report.

In order to cut down on the losses, it is also looking at financial restructuring to reduce interest costs. Tata Power intends to raise bonds up to Rs 2,000 crore to partly refinance Coastal Gujarat Power Ltd (CGPL)'s foreign currency loan. During FY18, CGPL's net loss widened to Rs 1,721 crore as against Rs 850 crore in the previous fiscal.

Last fiscal's loss, highest ever recorded by the company, was mainly due to increase in fuel prices, the under-recovery partly offset by lower operation and maintenance cost. Due to change in the law in Indonesia, Tata Power arm CGPL faced a challenge in utilising coal from the mine in Indonesia. As a result, the Mumbai-based power company has been procuring coal from various states within India.

As on March 31, 2018, Tata Power's long-term borrowings stood at approximately Rs 12,300 crore.

For the year ending FY18, on a consolidated basis, Tata Power's revenue had increased to Rs 28,921 crore, which is up 6% as compared to Rs 27,286 crore the earlier year, primarily due to higher generation and sales. Whereas, profit after tax increased by 144% at Rs 2,679 crore because of an exceptional gain of Rs 1,103 crore and a higher share of profit after tax from associates and joint ventures as compared to Rs 1,100 crore in FY17.