Infrastructure and power firm Lanco Infratech is scouting for opportunities outside India in EPC (engineering, procurement and construction) contracts.
The company is looking at places such as Indonesia, Bangladesh and West Asia, Chief Financial Officer J Suresh Kumar told Business Standard. “We are looking at both EPC and developer segments outside the country. Currently, the focus is on the power sector for overseas markets,” he said.
Lanco’s EPC business is about Rs 30,000 crore annually, of which almost Rs 22,000 crore come from internal group companies. In a presentation on its website, the company said in-house EPC reduces execution risks and enhances margins, besides enabling the firm to complete projects on an accelerated basis.
The company is looking to increase the share of projects outside their group. It had recently bagged a Rs 4,100-crore EPC project from a subsidiary of Moser Baer to execute a 1,200-Mw power project.
Over last three years, the company has implemented EPC and construction projects worth $1.3 billion. As of September last year, it had an order book of $5.47 billion, which excludes the Moser Baer project worth $872 million.
Lanco has a power capacity of 2,100 Mw, to increase to 4,000 Mw by the end of June and 15,000 Mw by 2015, Kumar said. The company also has shareholder approval to hive off its power business into a separate subsidiary. “We might look at an initial public offering for our power business sometime in 2012,” he said.
The power business contributed Rs 3,554 crore to the group’s total revenues of Rs 8,158 crore in 2009-10. Lanco also has interests in roads, construction and infrastructure projects. “The share of the power segment might increase to 75 per cent of our total revenues in a year or so,” Kumar said.