Domestic power equipment major Bharat Heavy Electricals Ltd (Bhel) is in talks with two independent power projects (IPPs) and two captive power projects for equity participation. The decision to pick up equity in private power projects is part of the PSU major's strategy to bag equipment supply orders through this route.
The two IPPs with which Bhel is currently negotiating are Bina power project in Madhya Pradesh, promoted by the A V Birla group, and Rosa power project in Uttar Pradesh.
Besides, Bhel has joined hands with BSES for a joint bid for the 2x250 mw Yamuna Nagar project in Haryana. While BSES propose to hold 90 per cent equity, Bhel will hold the remaining 10 per cent.
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Talking to Business Standard, Bhel chairman and managing director K G Ramachandran refused to name the IPPs and captive power projects in which the company is planning to take equity stake. "We are still in the process of negotiation and no final decision has been taken yet," he said.
Ramachandran said Bhel was also planning to take equity stake in several other private and state-owned power projects as a strategic route to push up its equipment supply business. He said the company was looking for equity investment opportunities in overseas power projects.
The company's decision to follow an aggressive marketing strategy for its power equipment follows its navaratna status which empowers the company board to take decisions on investments and joint venture formations without having to wait for governmental permission.
Bhel got shareholders' approval for all its future investment plans which include the proposed equity investments and joint ventures, at its annual general meeting held in Delhi on Wednesday. The AGM also approved the appointment of four government-nominated directors on the company board, besides changing some of the articles of association of the company in line with the autonomy package.
Ramachandran, however, said the company is not planning to create a corpus for its equity investment plans. "We have a Rs 500 crore line of credit with ICICI on a rollover basis which will be used for these investments initially. When requirement for such investments rise, we will tap either the debt route or equity expansion route to raise funds," he said.