For a company that is struggling under a mountain of debt, the news that the first unit of GMR Infrastructure’s Chhattisgarh power plant was synchronised with the grid stoked market interest. The stock is up 23 per cent for the week.

The 685 MW coal-based supercritical power plant is one of two units. The second unit is set to start commercial operations by the end of this fiscal. The total project cost is now around ₹11,015 crore, but the project has seen delays of almost a year with cost overruns of around ₹2 crore per MW.

Further, being coal-based plants, coal linkages and fuel supply will remain an overhang over the potential. Other gas-based power plants of GMR have been idle for several quarters now for want of fuel. GMR has two other coal-based power plants totalling 950 MW. Fuel supply apart, the company has so far signed power purchase agreements for only about 35 per cent of the capacity at the Chhattisgarh plant.

The June 2014 quarter saw GMR’s consolidated revenue grow 3.2 per cent. But operating profits were wiped out by the high interest outgo. Net losses widened to ₹575 crore from ₹381 crore in the June 2013 quarter. Loss for the 2013-14 fiscal was ₹1,618 crore on revenues of ₹10,653 crore.

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