State-run transmission utility Power Grid Corp of India will invest about Rs 18,500 crore (USD 4.1 billion) in FY12 to augment the country's power transmission capacity, its chairman and managing director, S K Chaturvedi, told Reuters on Wednesday.
Power Grid that has a market capitalisation of USD 10.11 billion had earmarked capital expenditure of Rs 11,900 crore in the fiscal 2010/11, while it plans to invest USD 27 billion over Twelve Five Year Plan commencing on 2012.
It hopes to commission additional transmission projects worth Rs 11,000 crore (USD 2.4 billion) in the current fiscal, a jump of 37.5% from the year ago, he said.
"This year we have done (projects) around Rs 8,000 crore, next year it will be more than Rs 11,000 crore," Chaturvedi said in a telephone interview.
Power Grid, which carries more than 400 billion units, or 51% of India's electricity, has seen an year-on-year increase of 9.5% in its total transmission line assets in FY11, data on its web site showed.
The firm mainly earns its revenue from transmission fees from power producers, so more the number of projects it commissions, would mean more revenue generation capability.
"(In FY12) Lot many new projects will be capitalised ... Also, we have awarded the contracts for tower leasing, so revenue will start coming from that segment also," Chaturvedi said.
Power Grid's broad band telecom network of 20,733 km connects more than 129 cities across India and it has leased some of its towers in the states of Himachal Pradesh, Punjab and Jammu & Kashmir to Macroquil for telecom usage, he added.
Power Grid will launch the second phase of leasing its towers for the telecom usage in next six months, he said.
The firm which has executed transmission projects or consultancy contracts in Afghanistan, Bhutan, Bangladesh, UAE, Nepal and Srilanka is eyeing more consultancy contracts in other geographies.
"The discussions are going on (for the consultancy jobs) with Kenya, Nigeria and Cambodia."
Power Grid has already executed projects in Nigeria.
On Tuesday, Power Grid has posted 32% jump in its net profit to Rs 2,697 crore, on total revenue of Rs 8,389 crore.
According to Thomson Reuters Starmine data, in past 30 days 12 brokerages have recommended the stock with 'strong buy' rating, while five have 'buy' with a mean target price of Rs 114.90 per share.
Power Grid shares are down 0.3% since January 1, while the benchmark Sensex lost 12.7%. At 11:37 am shares were down 0.76% at Rs 98.05 on a volume of 719,380 while the the benchmark index was down 0.67%.
