Shares of RattanIndia Power shot up 19.15 per cent on Monday’s early trades to reach an intraday high of ₹ 5.60 apiece after Kotak Mahindra Bank on Friday said that two of its arms have invested ₹ 732 crores in the company to help it reduce the cost of debt servicing. Additionally, the company has raised a loan of ₹ 1,114 crore in a transaction led by Kotak Mahindra Bank.
RattanIndia Power Limited is one of the largest private power generation companies in India. It is engaged in the business of dealing in power generation, distribution, trading, transmission and other ancillary and incidental activities. Its thermal power projects include the Amravati Thermal Power Project and the Nasik Thermal Power Project.
In an exchange filing, the company said it had reached a resolution with its previous lenders regarding the 1,350 MW Amravati Thermal Power Plant, in December 2019. Loans from Indian banks and financial institutions were taken over by international financial institutions, including Goldman Sachs and Varde Partners, through Aditya Birla ARC. As part of the resolution, both sets of lenders, outgoing and incoming, received a 15 per cent equity stake each.
RattanIndia Power has repaid an amount of ₹ 3,371 crore over the last three and a half years to international financial institutions, out of which ₹ 988 crore was prepayment. Recently, the company raised a fresh loan of ₹ 1,114 crores in a transaction led by Kotak Mahindra Bank. Thereafter, it has fully repaid the balance of senior debt to these foreign financial institutions.
The company’s operational performance has remained strong with its average exceeding ₹ 1,000 Crores per annum since commissioning over the last 8 years. Its Amravati
Power Plant has full PPA with Maharashtra discom MSEDCL and full coal linkage with Coal India subsidiary South Eastern Coalfields Limited.
As per a statement, Kotak Strategic Situations India Fund II and Kotak Private Credit Fund will be investing ₹ 582 crore and ₹ 150 crore, respectively, in the non-convertible debentures (NCDs) of RattanIndia Power.
In May, a media report had stated that the company is in talks with Kotak Mahindra Bank for the finance facility, which can bring down its debt servicing cost by 7-8 per cent.
Kotak said that the fundraising is structured to match the expected cash flow generation and reduce overall costs, which is in sync with the power company’s improving financial profile,
At 12:12 PM, RattanIndia Power’s shares were trading at ₹ 5.50 apiece, up 17.02 per cent. With a market capitalization of ₹ 2,524 crores, it is a small-cap company. Its shares were trading at a price-to-earnings ratio (P/E) of 1.41, which is significantly lower than the industry P/E of 15.97, indicating that the stock might be undervalued as compared to its peers.
Written By Simran Bafna
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