PTC in talks with wealth fund for $100mn PE venture

Power Trading Corp of India (PTC) is in talks with a sovereign wealth fund for setting up a private equity fund, which is likely to have an initial capital of about $100 million, according to a report.

The new fund is likely to be floated some time in the next financial year, Business Standard reported citing unnamed sources.

PTC India provides power-trading solutions in the country, transferring electricity from surplus producers to states with a power deficit. Its mandate is to develop a commercially vibrant power market in the country.

The firm already has a subsidiary, PTC India Financial Services (PFS), which lends to the power sector, including for renewable energy projects.

Shares of PTC India surged 2.19 per cent in morning trading today following the news. This is despite the fact that the company's net profit declined 11 per cent to Rs35.57 crore on a 3.3 per cent fall in net sales to Rs2,389.05 crore in the quarter ended September 2011 compared to the same quarter of 2010.

In May 2010, PTC India had announced the launch of an infrastructure fund in a joint venture with specialist emerging markets asset manager Ashmore.

PTC Ashmore India Energy Infrastructure Fund, which was to provide equity financing to power projects, did not take off due to various reasons.

PTC India has entered into power purchase agreements (PPAs) for over 15,000 MW, including 1,416 MW of cross border projects.