Mumbai, Feb. 20: BSES, now renamed Reliance Energy, today sprang a surprise preferential issue that will be considered at the February 22 meeting of its board.
Earlier, officials had brushed away queries on equity dilution, but the offer should now be viewed against the backdrop of Reliance’s ambitious plans in power, including the Rs 10,000-crore mega project in Uttar Pradesh.
Analysts are not willing to hazard a guess on who would get the shares. “It could be foreign investors or even the Reliance group,” an analyst said.
In a letter to the stock exchanges today, BSES said its board would meet on February 22 to consider, “inter alia, a proposal to issue equity/equity-related securities on a preferential basis, subject to necessary approvals as may be required in this regard”.
BSES, which spearheads Reliance’s power plans, distributes nearly 16,000 million units of power in Mumbai, Delhi, Orissa and Goa. The company generates 933 MW of power through its thermal power plants located in Maharashtra, Andhra Pradesh, Kerala and Goa.
Early last year, the company became part of the Reliance group with Reliance vice-chairman Anil Ambani at the helm.
Two other Reliance nominees were appointed on the board as whole-time directors.
Recently, the Reliance group identified Dadri in Uttar Pradesh as the site for its 3500-MW gas-based power project that entails an investment of more than Rs 10,000 crore. This project is the single largest investment ever in any sector in Uttar Pradesh.
Senior company officials have observed that it would ensure delivering power at a cost of Rs 2 per unit to consumers by optimisation of site development expenses, proximity to gas and water sources and well-developed infrastructure facilities. The project will be using natural gas as fuel.
The Reliance group recently said that while Dadri is 40 kms from Delhi apart from being well-connected for easy transportation of equipment, the HBJ pipeline of Gail is also close to the site. This is expected to help it in natural gas transportation.
Last year, BSES announced an investment of Rs 12,000 crore in a 3,000 MW gas-based plant at Nagothane.
Recently while announcing the third quarter results of Reliance Industries, Ambani had said that in addition to UP, the group had made presentations in five to six other states on the possibility of setting up power projects there.