Mumbai, May 19: Gail India plans to borrow up to Rs 7,000 crore in FY24 to fund the Rs 10,000 crore capital expenditure plan for this fiscal, a top company official said on Friday.
The state-owned company’s chairman and managing director SK Gupta said, “For this fiscal, we plan to spend Rs 10,000 crore”.
He added that even though FY23 was not good for internal resource generation, it invested Rs 9,100 crore, which was 15 per cent higher than the budgeted levels.
He exuded confidence that FY24 will be robust on the internal resource generation front, and there will not be any problem with continuing with the capex.
“We plan to borrow something around Rs 5-7,000 crore,” he added.
The company’s director of finance, RK Jain, said that given the present scenario in global finance, the borrowing will be done domestically and not in global markets.
Keeping in line with the Sebi mandate, a fourth of the borrowings will be in bonds while the rest will be bank borrowings, he said.
At present, the company’s overall long-term debt stands at Rs 9,800 crore, and the new bank borrowings will be for a tenor of over five years.
It is in the domestic market to raise a borrowing of Rs 1,500 crore right now, he added.
Meanwhile, Gupta said Gail has initiated legal proceedings against Russian energy giant Gazprom for failure to supply Liquified Natural Gas following the complications arising out of Russia’s invasion of Ukraine.
“We are taking up legally against them to press for specific performance and to claim the damages, and our request for arbitration has been filed…In the London court,” Gupta said.
Without divulging the exact sum that the company is claiming, Gupta said Gail has recommended its representatives for the arbitration, while its supplier is yet to appoint one.
He said normal supplies have been on for the last two months, but the price being paid by Gail is higher than the spot market prices because the contract entails a price, which is an average of nine months.
Gupta also said that the company is looking seriously at entering the solar energy components space, and will be looking at all the options, including tie-ups.
It is also confident of commissioning a green hydrogen production in the calendar year 2023 itself.
The company is also contemplating entering into the ethane cracker, but the plans are still on the drawing board.
Gupta said it will not be looking at pipeline monetisation because oil and gas companies are able to raise necessary resources from the markets. (PTI)
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