ETA Star plans IPO, acquires mine in Mozambique

ETA Star plans IPO, acquires mine in Mozambique

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New Delhi: In order to fund its new power projects in India, ETA Star India Projects, the Indian subsidiary of Dubai's ETA Star group with a revenues of $4 billion (Rs16,200 crore), is planning an IPO (initial public offering), reported livemint.com.

"We are debating the IPO timing. The proceeds of the IPO will go towards creating a 10,000MW capacity in India and working on our coal trading plans in the country. We are in search of locations to set up power projects in Tamil Nadu, Andhra Pradesh, Kerala and Karnataka. These will be port-based projects," ETA Star director Hameed Syed Salahuddin said.

The company has firmed up plans to set up a 1,200MW power project based on imported coal at an investment of Rs6,000 crore in Tamil Nadu. According to analyst estimates, an investment of around Rs40,000 crore is needed for 10,000MW of power generation capacity.

"You need to have growth capital to set up this kind of capacity and any developer will have to approach the capital market at some point of time. Power sector is an extremely attractive sector as compared to others even with the present volatility in the markets," said Shubhranshu Patnaik, an executive director at consultant PricewaterhouseCoopers.

The ETA Star group has also acquired a coalmine in Mozambique with a reserve of 100 million tonnes and will mine it through a joint venture with the Mozambique government. "The coal from this block will be used for our power projects in India and for our coal trading business," Salahuddin said.

The size of the market for imported coal that goes into power generation in India is around 20 million tonnes per annum. Coal imports are projected to more than double to 40mtpa by 2012 due to an increase in demand from power projects and the company has been aggressively pursuing coal mining rights internationally.

ETA Star India Projects recorded a turnover of Rs1,600 crore in 2006-07 and is expecting to close the current financial year (2007-08) with a turnover of Rs2,000 crore.

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