IVRCL seeks water treatment consultancy

IVRCL Infrastructures & Projects Ltd, the Rs 775 crore infrastructure and engineering major, is scouting around for international consultancy acquisitions in the water treatment segment.

The move is part IVRCL's gradual positioning of itself as a player whose core competency will revolve around handling water related infrastructure projects.

E Sudhir Reddy, vice chairman and managing director, IVRCL told Business Standard that the acquisition would be in the region of between Rs 50 and Rs 75 crore.

"We see a lot of potential in a country like India for water related projects and we are looking at the international market for companies that are specialised in offering consultancy for water treatment plants," he said.

"We have not mandated any merchant banker yet for the deal. Moreover there are not many merchant bankers who specialise in bringing such a deal to the table," he pointed out.

According to Reddy, India was poised on the verge of a boom for water treatment solutions, considering the fact that there is a huge demand for treated water from industries.

"The states as such are not able to meet the demand for water from industries and more and more companies in India are looking at investing in their own solutions. This means that there is a huge potential for companies like ours in offering solutions for volumetric water needs," Reddy pointed out.

Another pointer to IVRCL's growing focus on water related projects can be had from its burgeoning Rs 2000 crore order book position, wherein close to Rs 1,200 crore worth of projects are purely water related.

IVRCL had in its most recent project win secured an order worth Rs 58.72 crore for laying a water distribution network under Sujalam Suphalam Drinking Water Supply Scheme in Ahmedabad.

The project was awarded to IVRCL by Gujarat Water Supply & Sewerage Board. The other projects bagged by the company include Rs 24-crore remodeling of primary and secondary storm water drain in Bangalore from Bangalore Mahanagar Palika and miscellaneous works valued at Rs 8.87 crore.

IVRCL is also slated to enter into a 50:50 joint venture agreement with a Russian oil and gas engineering consultancy company GEO Engineering. The joint venture to be called GEO-IVRCL will offer oil and gas engineering consultancy to companies that are operating in the domestic market.

The agreement with the Russian company is expected to be inked in the near future. "The market for such services is growing in our country and we want to be a major player. This tie-up which is being mulled is at an advanced stage of discussions and an agreement will be signed very shortly," he said.

On the investment side, Reddy pointed out that typically consultancy companies of the kind GEO-IVRCL would not be highly capital intensive and the investment required would be only around the region of a couple of crores of rupees.

"We will offer clients, through this joint venture, drawings related to oil and gas exploration and high end engineering consultancy," Reddy said.