The Rs 30,000-crore Shriram group is planning to promote non-renewable power projects through joint ventures and by way of investing in upcoming projects. The group, which is already a strong player in renewable energy sector, is now looking at setting up thermal-based power plants in states like Andhra Pradesh and Maharashtra, and has earmarked up to Rs 2,200 crore for renewable, non-renewable power projects and in infrastructure business.
Speaking to Business Standard on the sidelines of VC Circle's Investment Forum II in Chennai recently, Arun Duggal, chairman, Shriram Capital Ltd (SCL), said that the group was looking at foraying into non-renewables sector. “We are looking at entrepreneurs who have got the expertise to start the business and we can support them by infusing money,” said Duggal.
It may be noted that the group has floated a company called Shriram Infrastructure and Power Ltd (SIPL) to promote large infrastructure projects. The company will focus on thermal and hydel power projects, coal mining, gas-based power projects and captive port projects, according to company sources.
These projects will be promoted as joint ventures with players who already have a track record in implementation of medium to large power projects.
“Diversifying into various business verticals has given Shriram the edge and momentum to bid and successfully work on infrastructure projects in India, in particular greenfield port and power sector,” said the source.
The group in association with several JVs has earmarked up to Rs 1,000 crore in order to incubate infrastructure projects until financial closure.
The company is currently evaluating thermal power projects in Andhra Pradesh, Maharashtra and Orissa. “We will work in association with existing players who have a track record in successfully implementing large projects in India and abroad.”
It may be noted that the group is one of the major players in the renewable energy sector. Its renewable energy arm Orient Green Power Company Ltd (OGPL), an independent renewable energy power producer, has set a target to become the largest renewable energy producer in India by reaching 1000 MW by 2013.
The company has earmarked around Rs 1,200-1,300 crore to add around 225 MW, generated through wind and biomass during the current fiscal. Currently it generates 198.5 MW through wind and 55 MW through biomass. The company proposed to set up these plants in Tamil Nadu, Gujarat, Andhra Pradesh, Maharashtra and Karnataka.
Besides India, the company is also planning to set up a 10.5 MW wind farms in Sri Lanka and Croatia each. OGPL already roped in Bessemer Venture Partners of US and Olympus Capital Holdings Singapore as investors.
Banking foray
On Shriram group's proposed foray into banking business, Arun Duggal, chairman, Shriram Capital Ltd (SCL), which is the holding company for the financial services and insurance entities of the group, said: "We have decided to launch a bank on our own and are not looking for any partners for the proposed foray. There is a long line in front of RBI, we are also standing."
The group's strength is the strong customer base, which is currently around 6 million and most of them do not have access to banking services at present and "we want to serve them fast," he said.
The group’s financial services businesses manage assets exceeding Rs 40,000 crore, has 6.5 million clients through 2700 branches across India. The group's core financial business include commercial vehicle finance, life and general insurance, consumer and enterprise finance, chit funds and others.
