CESC vice-chairman Sanjiv Goenka with Bhel director Ravi Kumar in Calcutta on Monday. Picture by Kishor Roy Chowdhury

Calcutta, Dec. 18: CESC, the flagship of RPG Enterprises, may come out with a public offer to part-finance its expansion plan.

CESC intends to add about 4,300 mega watt (mw) capacity in the next six years at an investment of Rs 16,000 crore.

CESC vice-chairman Sanjiv Goenka said there were several options before the company such as ADR, GDR or a public issue.

However, he maintained that there would not be any dilution of promoter’s stake in CESC.

“Whatever may be offered to the public/investors will be matched equally by preferential allotment to the promoter,” Goenka told The Telegraph.

Promoter’s holding stood at 39.5 per cent in CESC as on September 30, 2006.

The projects will be executed in the debt-equity ratio of 2.3:1, resulting in equity contribution of about Rs 4,700 crore.

Major part of the equity requirement will be met through internal accruals of CESC over the next six years.

The balance Rs 1,000-1,200 crore will be raised through ADR/GDR/public issue in case it executes all the projects on its own.

Goenka said a special purpose vehicle (SPV) could be set up for each project. CESC would hold a majority in the SPVs.

“We are not looking at any strategic investor. There may be some financial investors,” Goenka added.

CESC plans to set up a 2,000mw unit at Haldia in Bengal and 1,000mw unit each in Jharkhand and Orissa, apart from an additional 250mw generation capacity at its existing plant at Budge Budge for which it signed a contract with Bhel today.

In case, financial investors join the SPVs, CESC’s own contribution for equity will go down.

According to Goenka, a clear picture would emerge in a year’s time.

The Haldia project will be the first off the block where the acquisition of 1,000 acres could be over within this fiscal.

Budge Budge unit

The new 250mw capacity at Budge Budge is expected to come on stream by June ’09. The entire project cost is not expected to cross Rs 1100 crore while the EPC contract with Bhel is Rs 854 crore.