Mumbai: “This is just the beginning,” says Anil Ambani. The last 2-1/2 years the journey for R-ADA group shareholders has been on a rocket. The group shareholder wealth has risen from a mere Rs 16,500 crore in June 2005 to Rs 3,25,000 crore on Friday. “Yet it is paper wealth” he says. On being asked by a TV journalist whether the Reliance Power IPO will help him overtake his brother Mukesh as the richest Indian, Anil says he will rely on “breaking news” in his news channel. Excerpts of the Q&A at the press conference.
On whether Reliance Power has enough feedstock to fuel its power generation units
We firmly believe that India will be a gas-long market. And a number of gas companies have approached us. I will not, however, comment on the negotiations.
On the simmering feud with his brother’s company for KG gas
I am sure a win-win solution will emerge for both the groups.
• Check out our Yearender Special
On entering the power equipment sector
We are in talks with global majors to venture into energy equipment manufacturing. This will not only assure us of timely delivery but also ensure quality.
On power generation business being an annuity business with returns being capped
It is finally the mindset of the entrepreneur. We can accrue benefits of higher margins from the projects we are handling. We’ll like to participate in world scale projects. Power projects we have are no longer a cost-plus projects. The rates of return of 12 per cent for transmission, 14 per cent for distribution and 16 per cent for generation are for cost-plus power projects. I don’t think you’ll look at annuity rate of return in the current projects we have, which do have a ceiling on margins.
On wind energy
Wind energy is clearly part of our thought process. We are close to building 250 mw in the wind energy sector.
On nuclear energy
We have hired 100 personnel are experts in the nuclear power arena, after being trained suitably. Various issues such as nuclear fuel supply and other arrangements need to be cleared. While we are awaiting for some rules pertaining to the sector to change, although current rules allow 49 per cent stake to be held by the private sector.
On pre-IPO placement plans with institutions
A number of people had requested for a pre-IPO placement but we will stick to our filed prospectus and there will be no pre-IPO placement.
On listing date
We are conscious of the financial penalties at large for investors. We are targeting listing in the first week of February.
On raising huge debt, about Rs 1,20,000 crore for all the projects under Reliance Power
I personally believe that India has come a long way. We have more offers on table for long-term loans from foreign institutions. Some projects operate under the debt:equity ratio of 70:30 some may even become 80:20. The appetite is enormous.
On whether he’ll put his personal wealth to fund group companies?
All the wealth we are talking is paper wealth. If it needs paper wealth we’ll do that.
On whether Reliance Power IPO will make him the richest Indian, overtaking his brother Mukesh
Smiles. I’ll wait for Breaking News on CNBC.
The manpower his group will require to run the new power plants
Sasan, which is an ultra-mega power project when functional will require only 500 people per shift. But we’ll need 35,000 construction work force for setting up the project.
On whether Reliance Power has enough feedstock to fuel its power generation units
We firmly believe that India will be a gas-long market. And a number of gas companies have approached us. I will not, however, comment on the negotiations.
On the simmering feud with his brother’s company for KG gas
I am sure a win-win solution will emerge for both the groups.
• Check out our Yearender Special
On entering the power equipment sector
We are in talks with global majors to venture into energy equipment manufacturing. This will not only assure us of timely delivery but also ensure quality.
On power generation business being an annuity business with returns being capped
It is finally the mindset of the entrepreneur. We can accrue benefits of higher margins from the projects we are handling. We’ll like to participate in world scale projects. Power projects we have are no longer a cost-plus projects. The rates of return of 12 per cent for transmission, 14 per cent for distribution and 16 per cent for generation are for cost-plus power projects. I don’t think you’ll look at annuity rate of return in the current projects we have, which do have a ceiling on margins.
On wind energy
Wind energy is clearly part of our thought process. We are close to building 250 mw in the wind energy sector.
On nuclear energy
We have hired 100 personnel are experts in the nuclear power arena, after being trained suitably. Various issues such as nuclear fuel supply and other arrangements need to be cleared. While we are awaiting for some rules pertaining to the sector to change, although current rules allow 49 per cent stake to be held by the private sector.
On pre-IPO placement plans with institutions
A number of people had requested for a pre-IPO placement but we will stick to our filed prospectus and there will be no pre-IPO placement.
On listing date
We are conscious of the financial penalties at large for investors. We are targeting listing in the first week of February.
On raising huge debt, about Rs 1,20,000 crore for all the projects under Reliance Power
I personally believe that India has come a long way. We have more offers on table for long-term loans from foreign institutions. Some projects operate under the debt:equity ratio of 70:30 some may even become 80:20. The appetite is enormous.
On whether he’ll put his personal wealth to fund group companies?
All the wealth we are talking is paper wealth. If it needs paper wealth we’ll do that.
On whether Reliance Power IPO will make him the richest Indian, overtaking his brother Mukesh
Smiles. I’ll wait for Breaking News on CNBC.
The manpower his group will require to run the new power plants
Sasan, which is an ultra-mega power project when functional will require only 500 people per shift. But we’ll need 35,000 construction work force for setting up the project.
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