Indian Oil to acquire 26-% stake in Nuclear Power Kota project

Indian Oil Corporation (IOC) yesterday said it would pick up a 26-per cent stake in Nuclear Power Corporation of India's (NPCIL) 1,400-MWe power project at Kota in Rajasthan. IOC will invest Rs9,000 crore in the project.

''We would join NPCIL by picking up 26 per cent equity for Rs.900 crore in its 1,400-MWe Kota atomic plant,'' IOC Chairman and managing director BM Bansal told reporters in New Delhi on the sidelines of the Bio Fuel Conference held there.

NPCIL is setting up a 1,400-MWe (2 x 700 MWe) nuclear plant at Kota, which is scheduled for completion by 2015-16. ''The joint venture agreement would be signed in a month,'' Bansal added.

The project is proposed to be financed by both partners in the debt equity ratio of 70:30. IOC has already announced its intention to enter the power sector in a big way.

Meanwhile, the company is gearing up for its follow-on public offer in January, with which it is expecting to raise about Rs20,000 crore.

The government is looking to dilute 10 per cent of its equity holding in IOC through the FPO with a similar stake to be diluted by the PSU company.

The government's holding in IOC would reduce to 64.57 per cent post stake sale from the current 78.92 per cent. IOC has roped in six investment banks Merrill Lynch, Citigroup, ICICI Securities, Morgan Stanley, SBI Capital and UBS - to manage the public offer.

According to Bansal the FPO could be expected in the third or fourth week of January.