MSK plans foray into hydel power plant construction

Civil engineering and construction company MSK Projects India plans to get into setting up hydel power projects in the next financial year that will start April, a top company official said today.

"We are seriously looking at hydel power construction, and we will bid for projects starting next financial year (2008-09)," Managing Director Ashok Khurana said.

Of the country's total installed power capacity of over 135,000 mw, hydel power accounts for 25 per cent.

The government plans to raise hydel power's share to 40 per cent in view of its environment friendliness and cost effectiveness.

According to the Central Electricity Authority, the country has been able to tap merely 21 per cent of the total 148,701 mw identified hydel power capacity.

Shares of MSK on Thursday hit the upper circuit after the company earlier this week said it will offer up to 4.5 million shares to Subhkam Holding on a preferential basis. This will raise Subhkam's stake in MSK to 24.26 per cent.

Subhkam will acquire an additional 20 per cent stake through an open offer to shareholders. The offer, at Rs 84 a share, will be open December 14-January 2.

MSK will raise about Rs 37 crore from the preferential allotment. Khurana said the company will use the money to execute its build-operate-transfer contracts.

"We will have enough funds after the preferential issue. The rest of the expenditure will be made from the toll collected from various BOT projects," he said.

Khurana said MSK is currently executing turnkey projects worth Rs 1050 crore, of which about Rs 650 crore projects are on a build-operate-transfer basis.

The largest among these orders "�147 km Bhopal-Dewas road project costing Rs 550 crore "� is being executed in joint venture with two other private companies, Khurana said. MSK will have 51 per cent equity stake in the joint venture.

Projecting the financial performance of the company, Khurana said the company's revenues for the current financial year are likely to grow 81 per cent year-on-year to Rs 290 crore, while net profit is seen growing over 140 per cent to Rs 25 crore.