Bharat Heavy Electricals Ltd, the state-run power equipment maker, may offer a minority equity stake to a third technology partner in its proposed joint venture with Steel Authority of India Ltd (SAIL) to manufacture high-grade steel.
“We are in discussions with SAIL for setting up the plant. We estimate this will take five-six months to finalise. We are also looking for a third technology partner,” BHEL chairman and managing director, B P Rao, told Business Standard.
When asked if the third partner would have any stake in the venture or it would be just a tie-up for technology, he said, “We will offer a minority stake… BHEL and SAIL might have equal stake in the venture.” He, however, refused to give any detail.
The high-grade steel used to make power equipment is currently imported. BHEL's move is aimed at securing domestic supplies of essential raw material like CRGO steel, alloy steels, castings and forgings, among others.
Its order book is Rs 1,44,000 crore and it has the capacity to manufacture power equipment with a cumulative generation capacity of 15,000 Mw per annum, to be increased to 20,000 Mw by the end of 2010-11. It also plans to increase investment on its research and development to Rs 1,200 crore by 2011-12, from Rs 829 crore in 2009-10.
To diversify into other segments, the company has also appointed Crisil as the consultant for working out modalities to float a non-banking finance company (NBFC). The consultant will undertake a feasibility study on the proposed foray and give a report in the next two to three months, Rao said. The NBFC would be the company’s investment arm for financing of power projects. BHEL will have a minority stake in the proposed NBFC and get other strategic investors on board, is the idea.