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India Engineering Conglomerates GMR and L&T Raise their Solar Ambitions

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The Indian Solar Power has been one bright spot in the gloomy infrastructure and engineering sectors in 2011. With share prices crashing with growing corruption, land acquisition and financing problems, Solar Energy has surged in India thanks to government support and subsidies . While a number of Green Technology companies have started up to capitalize on the growing renewable energy trend, the established construction companies in India have not been far behind . While utilities like Tata Power, Adani, Reliance Power, NTPC have already built or are setting up power plants based on solar panels , L&T has become a major solar EPC players . L&T is now raising debt with a $100 million issue to fund its solar expansion plans .

The travails of Indian Infrastructure Stocks

India’s Infrastructure Sector which was considered the ideal play on India’s fast growing GDP and its huge infrastructure requirements long commanded nosebleed valuations.While realty stocks which are closely related to the infra ones had long collapsed after the GFC in 2008 ,the infrastructure stocks had retained their preeminence in the stock market rally.However end 2010 and 2011 has seen a vicious change in their fortunes.Stocks like IVRCL,IRB,Punj Lloyd,L&T,Gammon etc have seen their stock prices nosedive.The stocks have corrected far more than the broader market which has itself fallen more than 15% in  2011. The problems related to the infrastructure stocks are varied and they have converged for investors to totally lose confidence in this sector something akin to the realty sector

The GMR Group which has its fingers in a number of sectors has also managed to complete a 25 MW solar pv plant and is looking to set up more . Note other industrial groups particular Mahindra Solar One has also become very aggressive in the solar energy area. With multiple entries into the Indian solar industry, one can only hope that overcompetition does not make solar energy another instanace of the larger electricity industry which is going through a sever downturn.

It plans to grow the installed capacity to 100 mw from 25 now, said the company.GMR has also commissioned its first 25 Mw solar power project Gujarat with a total investment of Rs 360 crore.The project was awarded in October 2010 under the Gujarat SolarPolicy. Power from this plant will be supplied to Gujarat Urja Vikas Nigam Ltd on a 25 year Power Purchase Agreement under the Gujarat State Solar Policy.

GMR Energy is currently operating 808 MW of power projects and is in the process of executing another 7500 mw. “Out of this, 2500 MW capacity will become operational in 2012 through commissioning of Projects at Vemagiri in AP, Kamalanga in Orissa and Warora in Maharashtra,” the company said.

L&T Infra Raising $100 million in External Commercial Borrowings

L&T Infra Finance, a subsidiary of L&T Finance Holdings on Thursday said it has raised close to $ 100 million through the External Commercial Borrowing (ECB) route this fiscal, largely to fund solar power projects.“We have raised $ 100 million through ECB route so far this fiscal, mostly to fund solar power projects,” L&T Head Financial Services, Mr Shiva Rajaraman, told PTI.


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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