With a strong balance sheet, this one’s eyeing mega growth projects
Commenting on the Q3 2006-07 performance, Prasad Menon, MD, Tata Power had said, “The company is poised to acquire a significant national footprint and assume a steep growth trajectory. Our track record of steady project implementation and superior service augurs well for our consumers and various stakeholders moving forward.” And looking at the projects pipeline that Tata Power boasts of, his speech may not be very different at the end of Q3 2007-08.
With the government planning to increase total installed generation capacity to 2,05,000 MW by March 2012, from 1,24,310 MW at the end of March 2007, the power sector looks definitely lucrative. Almost all players in the segment are excited about the future. But going by nature’s law, ‘the first mover will have its own advantages.’ The Prasad Menon led Tata Power has announced projects to enhance total installed capacity to 12,000 MW from the existing 2,323 MW in the next five years. As Sanjeev Zarbade, Analyst (Capital Goods), Kotak Securities, says, “Tata Power is progressing in its projects, whereas others have made announcements, with no real progress. This is likely to keep Tata Power a step ahead in this race.”
Part of the Tata Group for over seven years, Menon had previously scripted a success sage for Tata Chemicals. Small wonder that Tata Power is also blossoming under his ageis: The 4,000 MW Mundra Ultra-mega Power Project (for which the company has signed a contract with Toshiba Corporation for Turbine Generators) is progressing as per schedule. To meet higher demand for coal, it has also acquired a 30% stake in two Indonesian coal mines. To add an impetus, the company is also developing a coal block along with Hindalco. Apart from the Mundra project, expansion projects that are currently underway include 120 MW expansion at Jojobera near Jamshedpur, and a 250 MW expansion at Trombay, near Mumbai.
Further, Tata Power is also planning to enter shipping and logistics to facilitate coal shipment for its power plants. This would help the company to control its supply chain, vital for their aggressive capacity expansion and production.
The company has high aspirations in the global arena too. Menon is eyeing to bid for Singapore state investor Tamasek Holding’s interest in three electricity companies, Tuas Power, PowerSeraya and Senoko. The bidding is expected to be over by late 2008, and the book value of these three companies is $1 billion. Tata Power has also been invited to participate in the bidding for a project in South Africa to build and operate two gas-fired power plants. If it bags the contract, Tata Power would need to construct open-cycle gas turbine plants by October 2008.
Commenting on the Q3 2006-07 performance, Prasad Menon, MD, Tata Power had said, “The company is poised to acquire a significant national footprint and assume a steep growth trajectory. Our track record of steady project implementation and superior service augurs well for our consumers and various stakeholders moving forward.” And looking at the projects pipeline that Tata Power boasts of, his speech may not be very different at the end of Q3 2007-08.
With the government planning to increase total installed generation capacity to 2,05,000 MW by March 2012, from 1,24,310 MW at the end of March 2007, the power sector looks definitely lucrative. Almost all players in the segment are excited about the future. But going by nature’s law, ‘the first mover will have its own advantages.’ The Prasad Menon led Tata Power has announced projects to enhance total installed capacity to 12,000 MW from the existing 2,323 MW in the next five years. As Sanjeev Zarbade, Analyst (Capital Goods), Kotak Securities, says, “Tata Power is progressing in its projects, whereas others have made announcements, with no real progress. This is likely to keep Tata Power a step ahead in this race.”
Part of the Tata Group for over seven years, Menon had previously scripted a success sage for Tata Chemicals. Small wonder that Tata Power is also blossoming under his ageis: The 4,000 MW Mundra Ultra-mega Power Project (for which the company has signed a contract with Toshiba Corporation for Turbine Generators) is progressing as per schedule. To meet higher demand for coal, it has also acquired a 30% stake in two Indonesian coal mines. To add an impetus, the company is also developing a coal block along with Hindalco. Apart from the Mundra project, expansion projects that are currently underway include 120 MW expansion at Jojobera near Jamshedpur, and a 250 MW expansion at Trombay, near Mumbai.
Further, Tata Power is also planning to enter shipping and logistics to facilitate coal shipment for its power plants. This would help the company to control its supply chain, vital for their aggressive capacity expansion and production.
The company has high aspirations in the global arena too. Menon is eyeing to bid for Singapore state investor Tamasek Holding’s interest in three electricity companies, Tuas Power, PowerSeraya and Senoko. The bidding is expected to be over by late 2008, and the book value of these three companies is $1 billion. Tata Power has also been invited to participate in the bidding for a project in South Africa to build and operate two gas-fired power plants. If it bags the contract, Tata Power would need to construct open-cycle gas turbine plants by October 2008.
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Source : IIPM Editorial, 2008
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
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