ICSA plans US, European buys

BUYERS' MARKET

Hyderabad-based ICSA, the pioneer of embedded technology-based solutions to detect and reduce power transmission and distribution (T&D) losses, will soon acquire two T&D sector companies with front-end marketing capabilities in the US and Europe.

"We have entrusted a leading merchant banker to close the deals and hope to complete at least two deals in the near future," said Chairman and Managing Director G Bala Reddy.

ICSA plans to takeover at least three companies in the next financial year in abroad. Exports contributed a meagre 5 per cent to the revenues of Rs 332 crore in FY07. The acquisitions would increase this share substantially, he said.

ICSA plans to spend $20-30 million on each acquisition and has identified suitable targets in both the geographies.

Last year, Goldman Sachs and Citigroup invested $52 million (about Rs 234 crore) in ICSA. ICSA plans to use part of these proceeds for the acquisitions.

Further, the company had posted profits of Rs 59 crore during the last financial year. In the 2007-08, profits could be in excess of Rs 100 crore, against a turnover of over Rs 600 crore. Sources said internal accruals could also be utilised for the buy outs.

While the transmission and distribution losses stand at 35 per cent in India annually, the figure is about 8 per cent in western countries. Some of the patented technologies developed by the company could assist power utilities in overseas markets with automated data generation for their power subscribers.

ICSA's Intelligent Automatic Meter Reading System (IAMR), a wirelessly enabled data collection system for energy metres, helps in automatic monthly billing and in detecting tampering of the metres.

Other products include a Multiplexer Unit for data collection of 8-16 metres in a single location, a distribution transformer monitoring system, a substation controller, a micro remote terminal unit to monitor and control sub-station feeders and power theft detection devices.

Reddy said the company had also extended customised versions of its products for monitoring and protection of oil and gas pipelines.