The Power Grid Corporation of India Limited (PGCIL) is planning to raise Rs. 3,800 crore (USD 863 million) through debt instruments such as bonds and loans during the fiscal year 2007-2008. In the past, the PGCIL would have asked the government to provide it soft loans and the new found economic confidence is prompting it to seek monies from private markets and is indicative of future trend that is to be expected for public sector units to raise money. Already the PGCIL received only marginal budgetary support compared to Rs. 419 crore (USD 95 million) in 2005-06.
Driving the PGCIL to financial autonomy is the dream that its capacity to raise funds independently will bring it "Navratna" status and therefore exclude it from disinvestment. However, the PGCIL will dilute 5% of its capital through an initial public offering. The federal cabinet has already authorized dilution up to 24 per cent of its capital to raise money. The company makes profit (Rs. 1009 crore or USD 229 million) or 33 per cent of its turnover of Rs. 3,554 crore and year-on-year revenue growth of 25 per cent and net profit growth of 28 per cent. It is worth Rs. 9,981 crore (USD 2.268 billion).
By 2012, the PGCIL is planning to build a national power grid at a cost of Rs. 71,000 crore (USD 16.13 billion). Of this, the PGCIL will dilution its capital to raise Rs. 50,000 crore and Rs. 3,800 crore through bonds.
The company plans to carry 50,800 megawatt (mw) by 2012 on this grid.