Blackstone Group LP will invest 2.75 billion rupees ($59 million) to buy a 12.5 percent stake in India’s Monnet Power Co., the world’s biggest private-equity firm said in a statement today.
Monnet Power, a unit of sponge-iron maker Monnet Ispat and Energy Ltd., is building a 1,050 megawatt coal-based power plant backed by pit-head mines in the eastern Indian state of Orissa. Monnet Power is building an additional 2,000 megawatts of power generation capacity, the statement said.
“Monnet Power with its mine mouth coal plant has one of the lowest costs of producing power,” said Akhil Gupta, Blackstone’s India chairman, in the statement.
Demand for power is expected to rise as Asia’s third-largest economy is poised to grow 8.5 percent in the financial year ending March 2011. India faced a 9.8 percent shortfall in power generation between April and December last year, according to a finance ministry document.
Blackstone shares fell 2.4 percent to $9.33 as of 10:52 a.m. in New York Stock Exchange composite trading. Monnet Ispat rose 0.1 percent to 402.80 rupees at close of trading in Mumbai.