SWFL to be renamed GWPL, IPO to follow soon

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NEPC India  was in news due to the prospect of getting 12.5 shares for every 100 shares in NEPC for Southern Wind Farms limited.

Ravi Chandra, Director of Southern Wind Farms says that SWFL will soon be called Global Wind Power Limited. Meanwhile, Sudhindra Rao, CEO at SWFL says that at present the ADAG Group hold 25% in SWFL but they have the option of taking it upto 51%.

Excerpts from CNBC-TV18's exclusive interview with Sudhindra Rao and Ravi Chandra:

Q: Since you helped the restructuring and the deal, when do NEPC shareholders get those 12.5 shares of SWFL?

Chandra: The arrangement is that once the listing of SWFL happens, we will try and disperse the shares to NEPC shareholders. 

Q: What is the timeline?

Chandra: Within a year's time or so.

Q: Could you explain which entity will be listed in the market after the listing happens with Global Wind Power ?

Chandra: The name of Southern Wind Farms will be changed to Global Wind Power Limited because the business per se is now on a global plane and so we wanted to have a different name than a localised name. So the same company will continue, but the name will be changed.

Q: To reconfirm, this listed entity will not have any other holding in any other company? Southern Wind will be renamed and then listed?

Chandra: Yes.

Q: Could you tell us more about ADAG's holding within this company and whether or not they are looking at the option of increasing their stake in SWFL?

Rao: At present ADAG holds about more than 25% in the SWFL and we have the options to take it up to 51%. We have the warrants with us.

Q: At what valuations has ADAG bought into this company?

Rao: I don't want to comment on that at the moment.

Q: So will you do an IPO over the next six months ?

Rao: Yes, we will be coming into the market.

Q: Can you explain the business to us? What sort of projects are you planning to get into? Which markets do you plan to be more active in? Is it domestic or export?

Rao: We have got into wind energy as a strategy from the ADAG group. The main reason being that as a business we see lot of boom in the market especially in India where the regulation demands about 5% of the power generation to be through the non- conventional energy resources.

We see a lot of potential within the group like from Reliance Energy and others as opportunities for SWFL on a competitive basis to put up wind turbines.

It is mostly domestic because we have lot of scope in India. There is about 55,500 mega watt of capacity to be installed and only 5,000 has been installed so far.

Q: The intent of asking the question on valuation was that NEPC shareholders which is a listed stock, would be trying to figure out what their 12.5 shares would be worth in SWFL. Could you give us a ballpark idea of SWFL's financials and what it could be valued at?

Chandra: At this point of time it has been strategically offered to NEPC shareholders in the whole deal. Part of the shares will be allotted to the NEPC shareholders, which is approximately about 86.5 lakh shares. So at this point of time, valuations wouldn't be available but once the company comes out for listing at that point of time everybody will be aware of the entire valuation. it is too early to comment.

Q: Could you tell us about the financials of this company then?

Rao: There was a special purpose vehicle created to acquire the NEPC's wind energy business. This is the first year of operations for us and there is no other business. Our vehicle has been created only for the future business.

We have some commitments of NEPC for some wind turbines to be installed, which we will complete this year. By next year we will be fully operational. 

Q: Do you foresee it as being profitable by the end of this financial year or by the time you list?

Rao: We foresee a break-even by this year-end but the next year should be a good year for us.