Identifying power as a major core business for the group, and which is expected to account for 20 per cent of group turnover by the turn of the century, Ispat Industries Ltd, the Ispat group flagship, has put in bids for three sites of the Rs 600 crore power projects being promoted by the Maharashtra State Electricity Board (MSEB).
The results of the bids are expected to come in by November. MSEB had recently floated global tenders for 160 mw power projects in the state for which it has identified about 14 sites. Ispat has put in bids for three of the earmarked sites.
Ispat officials told ......Business Standard, "After steel, power will be the most important area of business for the Ispat group, followed by telecommunications."
The group is looking at the states of Gujarat, Maharashtra, Karnataka and Andhra Pradesh for expanding its presence in the power sector. Maharashtra, however, figures high on the preference list of the group for its forays in the power sector. This is primarily due to the extensive infrastructure benefits the Ispat group enjoys in the state as a result of its proposed Rs 4,750 crore hot strip mill project at Dolvi.
"Hot rolled products from the Dolvi plant will hit the market by the end of the year, and we have secured the letter of intent (LOI) for providing basic telecommunication services in the Maharashtra circle. Since we already have a presence in steel and telecommunications in the state, the foray into power would be relatively smoother", officials said.
"Andhra Pradesh has been very aggressive about the power sector and the indications are very encouraging." they added.
The group expects its business to grow at least six-fold in Maharastra alone in the three sectors by the turn of the century, officials added. The Mittals have constituted a core team within the group explicitly for the purpose of identifying and implementing power projects.
While the technical section of the team is based in Nagpur, the corporate and finance arms are based in Mumbai and Calcutta respectively. The core team has been in operation for about three years now. It is also putting up a Rs 1,600 crore power project in Andhra Pradesh in collaboration with the Swedish frim ABB.
The Swedish major is expected to pick up 26 per cent in Ispat Power, the joint venture company between ABB and Ispat.
ABB has already been assigned by Ispat to set up a 350 mw captive power plant at Dolvi which will supply power to the company's proposed hot strip mill.
The agreements for the company's Bhadrawati power project have also been finalised. Necessary clearances from the union government are currently being awaited, and tying up of finances for the project is currently in progress.
