OPG raises £60m for Indian generating capacity

OPG Power Ventures has raised £60m at 93p a share to finance additional generating capacity in India. OPG has 107MW of generating capacity in operation and it will have enough cash to build a further 555MW of capacity. There was still £17m of unrestricted cash in the balance sheet at the end of September. OPG's target is to have 1,250MW operational by 2015. Demand for power in India is growing fast. Industrial production rose by an annualised figure of 9% according to the latest data. However, new generating capacity is coming on stream more slowly than the Indian government had hoped. This has created power deficits. During the six months to September 2010, the existing capacity has realised prices of around Rs 4.80 per KWh. Group revenue grew 56% to £8.95m and the profit improved from £3.52m to £4.06m. OPG has already begun work on 383MW of new capacity. It has also bought 120 acres of land in Karnataka with potential for the construction of a 250-300MW power station. There is already a partially constructed 12MW thermal power plant on the land. OPG has signed a memorandum of understanding with the Gujarat government for the development of 5,400MW of generation capacity, including 1,400MW of gas-based capacity.The share price has risen by 22.5% over the past month. It closed at 98p, prior to the announcement of the placing. The twelve month high is 110p. OPG joined AIM at 60p a share on 30 May 2008.