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A2Z plans 500-Mw power plant from municipal waste;plans INR 350-cr public issue

A2Z Group was founded in the year 2002 and achieved a turnover of INR 750 Crore during 2008-2009 and INR 1200 Crore for 2009-2010.
The Group covers three business verticals of which the Engineering, Procurement & Construction (EPC) Company is the largest entity. Its business operations encompass Electrical Distribution Systems, EHV Switch yards, Transmission lines, Railways Electrification, Discom IT Applications & BOP for Power Plants.

The other company A2Z Infra Services entails all Facility management for Buildings, Malls, Offices and Residential Complexes inclusive of Security Services.

The Third vertical has the A2Z Infrastructure which pilots Renewable energy, the Municipal Solid Waste projects and also the waste water remediation infrastructure in the country.

According to this report, the company raised about 150 Crore from the private equity firm India Equity Partners (IEP) and Beacon India between  2007 and 2009. The company had earlier raised money from Rakesh Jhunjhunwala who bought a 22% stake in 2006. The promoter and his family currently hold about 55%.

According to reports (read here and here) A2Z plans to raise around Rs 350 crore through a public issue of shares to fund its expansion plans for which the company is expected to sell about 10% of the total equity through a public issue.

The company has diversified into waste management, and plans to aggressively scale up this business after the public issue. The proceeds of the public issue will be used to fund the company’s several projects across renewable energy and waste management.

The company has mentioned that it was planning to invest about INR 3,000 crore to set up a 500-Mega watt (Mw) biomass power plant from municipal solid-waste, within two years and would require an equity contribution of about INR 500-600 Crore.

The company currently has a biomass power generation capacity of about 60 Mw.

In Punjab, the company is setting up three co-generation power plants in collaboration with sugar mills on a Build-Own-Operate-Transfer (BOOT) model for a period of 15 years. A2Z will provide steam and power for operating the manufacturing process of the sugar mills during the crushing season.

A2Z, which bagged one of the largest municipal solid-waste management contract from Kanpur municipal corporation, plans to set up 10-15 Mw capacity power plants in various cities, depending on the availability of processed solid waste. About 100 tonnes of solid waste is required as fuel for one Mw of power. The company will set up India’s first municipal solid-waste-to-power project in Kanpur, using RDF (Refuse Derived Fuel), which is derived from solid waste.

According to reports the total solid waste produced in Indian cities is capable of powering about 1500MW of capacity and with a target of 500MW, the company has ambitious plan to capture about a third of the market.

The renewable energy power generating companies are all lining up ambitious initial public offerings to raise capital for huge capacity expansion plans.

Just recently, reports in the media talked about Orient Green Power that is  backed by PE firms Bessemer and Olympus Capital, planning to be the first green energy IPO in India. The company  has about 175 MW in operations in India and was expecting a valuation of about 2500 Crore. It has another projects worth 500 MW at various stages of development, with around 300 MW coming in wind energy and 200 MW in biomass.

Suryachakra Power plans to float a company on AIM and  raise about USD120mn-150mn and has an installed capacity of  20MW of biomass and a planned commissioning of 30MW  in the next few months. The company has a capacity expansion of about 220MW planned.

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