GMR Energy has successfully raised Rs 1,600 crore through a five-year non-convertible debt instrument, priced at a substantial 14.85% coupon rate. This high-yield offering has attracted notable investors, including Allianz Global, Trust, and DSP Finance.

Debt Issuance Details

The coupon rate of 14.85% is more than double the existing risk-free rate for comparable duration instruments, reflecting the perceived risk and market conditions. The proceeds from this debt issuance will serve two primary purposes:

1. Partial repayment of existing loans
2. Extension of intra-group lending

Investor Interest and Secondary Market Plans

The high-yield nature of the debt has garnered significant investor attention. Some investors are reportedly planning to offload portions of the acquired debt in the secondary market, targeting large foreign banks and family offices as potential buyers.

Factors Influencing the High Cost

The elevated coupon rate can be attributed to several factors:

• The holding company structure of GMR Energy
• Reduced interest from foreign banks in thermal power producers

GMR Group's Increasing Stake

Concurrent with this debt raise, the GMR Group has been actively increasing its ownership stake in GMR Energy:

• The group's stake has risen from 58.00% to nearly 87.00%
• This increase follows the acquisition of Tenaga Nasional's 29.00% stake
• A deal has been signed for Temasek's 12.00% stake, which will push GMR Group's ownership to almost 99.00%

GMR Energy's Power Assets

The company operates four power assets, including:

• GMR Kamalanga: 1,050 MW thermal power plant
• GMR Warora: 600 MW thermal power plant

GMR's Airport Business Fundraising

It's worth noting that GMR's airport business, separate from the energy division, has also engaged in significant fundraising:

• Raised Rs 6,000 crore across two tranches
• First tranche priced at 10.35%
• Second tranche priced at 10.50%

This debt issuance by GMR Energy highlights the company's efforts to manage its financial structure and the continued investor interest in high-yield instruments within the Indian power sector. The substantial coupon rate also underscores the current challenges and risk perceptions associated with thermal power producers in the market.

BGR Energy Systems , a prominent player in the power equipment manufacturing and EPC contracts sector, has reported a significant increase in its net loss for the first quarter. The company's financial performance continues to face challenges amid ongoing restructuring efforts and market headwinds.

Financial Highlights

BGR Energy Systems reported a consolidated net loss of Rs 266.03 crore for Q1, a substantial increase from the Rs 111.68 crore loss recorded in the same quarter of the previous fiscal year. The company's revenue saw a sharp decline of 49% year-on-year, dropping to Rs 88.61 crore from Rs 173.82 crore in the corresponding quarter.

Key financial metrics:

Segment Performance

BGR Energy Systems operates in two primary segments:

1. Construction and EPC Contracts: This segment contributed 87% of the total revenue, generating Rs 77.44 crore.
2. Capital Goods: The segment accounted for the remaining 13% of revenue, bringing in Rs 11.17 crore.

Financial Position and Concerns

The company's financial position remains precarious:

• Total liabilities: Rs 6,563.27 crore
• Negative net worth: Rs 1,905.51 crore

Auditors have raised material uncertainty about BGR Energy Systems' status as a going concern, citing continuous cash losses, negative net worth, and delays in debt repayments.

Management Initiatives and Challenges

• Promoters have infused unsecured loans amounting to Rs 433.18 crore to support ongoing operations.
• Management is in discussions with bankers for a restructuring package.
• The company is pursuing a claim of Rs 804.62 crore with NUPPL (Neyveli Uttar Pradesh Power Limited) for additional work performed.
• Extra costs of Rs 93.57 crore were incurred during the quarter for executing additional scope of work in the Balance of Work Package with NUPPL.
• The claim is currently under review by a Conciliation Committee.

Management Changes

• S. Pattabiraman will step down as Chief Financial Officer (CFO) effective August 31, 2025.
• S. Sundar, the current Company Secretary and Compliance Officer, will take on the additional role of CFO starting September 1, 2025.

Looking Ahead

BGR Energy Systems faces significant challenges in turning around its financial performance. The company's ability to secure new contracts, successfully restructure its debt, and resolve ongoing claims will be crucial in determining its future trajectory. Investors and stakeholders will be closely watching the company's efforts to address its financial difficulties and return to profitability in the coming quarters.