Tata Group head honcho Cyrus Mistry is betting big on the domestic power sector. Tata Power is in talks with Bhopal headquartered leading print media company DB Corp for a potential buyout of the promoter owned power generation arm Diligent Power, according to four individuals familiar with ongoing negotiations.
“Diligent Power Ltd which has two thermal power plants with a combined capacity of 2520 MW has been put on the block. Its a non-core, capital intensive asset. The promoters are keen to sell the arm provided they get the desired valuations and are in talks with Tata Power. At 8 crores per MW, the estimated enterprise value of both the plants can be pegged around Rs 20,000 crores, but there will be a significant debt component as well,” according to two of the four sources cited above. Diligent Power has a 1200 MW coal based thermal power plant in Chattisgarh and a 1320 MW coal-based thermal power plant in Madhya Pradesh. Water & fuel has been secured for both the projects, according to the company website.