December 02, 2008

DVC to raise INR 1,000 crore via SPV

BS reported that Damodar Valley Corporation will raise INR 900 to INR 1000 crore through a special purpose vehicle in about 6 months and has appointed an international consultancy company KPMG to prepare a feasibility study for the purpose.

As per report, DVC would initially dilute 10% stake in the SPV and raise between INR 900 and INR 1000 crore. The SPV would be a wholly owned subsidiary of DVC. A DVC official said that "We would initially offload 10% of the stake and watch how the market reacts, although the final call would be taken once we get the KPMG report. The size of the issue would be anything around INR 900 to INR 1000 crore."

The official added that "Being a public enterprise, there are some sentiments attached. So it is difficult to gauge the public reaction to the IPO announcement. Therefore, KPMG has been asked to study the legal views on the future stake holding in the SPV and assess the possible reactions from different quarters."

Mr AK Burman chairman of DVC said that it has not decided on the projects that would be undertaken by the proposed SPV. He added that "We have appointed KPMG to study and suggest measures towards the IPO. KPMG would complete the report shortly and we would decide accordingly. We are yet to decide on whether we would shift some of the existing projects or have a complete new set of projects."