Companies & Sectors
GAIL to supply gas to Andhra Pradesh for generating power

Andhra Pradesh's gas-based power plants have been producing 1600 MW of electricity less than the total installed capacity of 2770 MW due to non-availability of gas


Hyderabad: Gas Authority of India Ltd (GAIL) has agreed to supply 2.5 million metric standard cubic metres per day of re-gassified liquefied natural gas (LNG) to power-starved Andhra Pradesh to enable it generate an additional 500 MW of power, reports PTI.
 
GAIL chairman and managing director BC Tripathi gave this assurance to Chief Minister N Kiran Kumar Reddy during their meeting, a press release from the chief minister's office said.
 
Andhra Pradesh's gas-based power plants have been producing 1600 MW of electricity less than the total installed capacity of 2770 MW due to non-availability of gas. This has pushed the state into darkness and also resulted in forced closure of industries for 12 days a month due to the gap between electricity demand and supply stretching to 35 million units per day.
 
With uncertainty continuing over natural gas supply from the D6 fields of KG Basin, the state began looking for alternative supplies and requested GAIL for help.

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PE deals in India rise 44% at $7.6 billion in 2011 says McKinsey

Average deal size in 2011 plummeted to $30 million in 2011 from $50 million in the previous year, while the deals under $10-million increased fourfold


Mumbai: Describing India as an "unusual mixture of high promise and real uncertainty" for private equity (PE) funds, consultancy firm McKinsey said there was a 44% cumulative jump in deal values at $7.6 billion in 2011, reports PTI.
 
The increase was driven largely by smaller deals and even after a healthy jump, the cumulative deal value continues to be merely 50% of the $14.7 billion witnessed during the peak of activity in 2007.
 
The report said the average deal size plummeted to $30 million in 2011 from $50 million in the previous year, while the deals under $10-million increased fourfold.
 
"Large investments are now increasingly rare in the country," the report said, attributing it to higher expectations on valuations by local companies.
 
A majority of the deals were on the company expansion front, it said, noting that there was a three-fold increase in such deals over the previous year, which now account for 72% of total activity.
 
Stating that foreign funds are sitting on cash pile of over $20 billion, the firm noted headwinds like uncertainties in the regulatory environment and increased local competition.
 
"Those seeking to meet the new demand for capital must also contend with regulatory changes. Newly adopted provisions have been decidedly mixed for the PE industry, while further proposals could pose even greater threat, particularly for foreign players."
 
The PE industry, which typically invests in the country through tax havens like Mauritius, has been alarmed due to the proposed General Anti-Avoidance Rules (GAAR).
 
Given the high competition from local players, the report asked funds to adopt a lean operating model.
 
On the question of exits, which determines the success of an investment, McKinsey noted with caution that they decreased by 43% in 2011 on a higher base.

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Siyaram Silk Mills: Consumption Story

Siyaram Silk Mills Ltd (SSML) is currently trading on the Bombay Stock Exchange (BSE) at...

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