GVK Energy Limited

Nature of the business

GVK Energy Limited (“GVK Energy”), a subsidiary of GVK Power and Infrastructure, is one of the leading power generation companies in India. Its planned portfolio comprises 4,047MW of power assets, diversified by fuel type, stage of development and geography. Of this, 915MW is operational and 870MW is under construction. 100% of the generation capacity that is operational and under construction is underpinned by long-term power purchase agreements with state utilities. In addition, GVK Energy is developing two mining projects to supply coal to its own thermal power plants under construction or development.

Investment rationale

The market fundamentals for the business are attractive. Demand for power in India is expected to grow substantially, with the peak power deficit currently standing at c. 10%.

GVK Energy has a defensive asset portfolio.  The near-100% planned offtake through long-term (typically 15 years) power purchase agreements with state utilities provides a high level of revenue stability.

The business is backed by a strong promoter group, with an excellent execution track record of developing, implementing and operating large scale infrastructure projects in India over the last two decades.