Om Metal Infraprojects, the largest hydro-mechanical solutions provider for hydro projects, plans to acquire engineering, procurement and construction (EPC) players in hydro and thermal power sectors, as part of a diversification and forward integration strategy.
The company plans to initially bid for EPC projects in these sectors with established players on a project-to-project basis and will also target acquisition of suitable players costing less than Rs 200 crore, said Vikas Kothari, executive director. “We have many decades of experience in hydro-mechanical project execution and the EPC business will be a natural progression for our business,” he said.
Hydro-mechanical works for hydro-electric and irrigation dams mean solutions such as storing and regulating flow of water from the dams. This constitute five to 10 per cent of the total project cost for setting up a dam. Om Metal is the largest player in this segment in India, with over 60 per cent share. The KK Birla Group-promoted Texmaco is the second largest player in this segment.
Vikas Kothari said the company, with a turnover of over Rs 100 crore, currently has an order book position of Rs 650 crore, which has to be carried out within the next three years. There are four projects from NHPC Ltd, two from NTPC and one each from the North Eastern Electric Power Corporation and the Government of Andhra Pradesh. The company is also expecting orders worth Rs 300 crore within the next three months.
With the government planning to add 50,000 Mw of power from hydro-electric projects by 2017, Om Metals hopes to gain orders worth at least Rs 10,000 crore by the end of the next five-year plan, he said.
Om Metal and its partner, Subhash Projects and Marketing Ltd (SPML), will dilute 25 per cent stake each in the special purpose vehicle, Pondicherry Port Ltd (PPL),to a strategic investor having expertise in marketing and development of port projects, said the executive. PPL is a 50:50 joint venture between SPML and Om Metals to develop the Pondicherry port. Financial closure will happen by next year and the project will be completed within the next four years.
The company also has a 20 per cent stake in a multi-purpose special economic zone planned at Pondicherry.