CetharLtd, the Tiruchirapalli, Tamil Nadu-based power equipment maker, will decide on the timing of its initial public offering after it completes the land acquisition process for its 4,000 mw coal-fired power project, said founder-chairman K Subburaj.
He had in April said the company planned to go public to raise Rs2,000 crore for its power generation plans through its arm Cethar Energy.
“We want to list in the next 15 months but it depends on when we buy all the land for the project. We hope to finish the process by October and then take a call on the IPO,” Subburaj told DNA Money by phone from Chennai.
The company has already acquired half of the 1,100 acre required for the project.“Once we acquire the land, we’ll look at buying a coal mine in Indonesia or Australia or South Africa for the project,” he said.
Cethar raised Rs370 crore from private equity firm Barings Capital in December, with an option to raise another Rs100 crore.
The company takes up boiler turbine generator (BTG) contracts and has an order book of Rs8,000 crore, all for sub-critical units from private power developers. It manufactures sub-critical and super-critical boilers in Tiruchirapalli through a technology transfer agreement with American firm Riley Power Systems. Cetharhas an annual boiler-making capacity of 8,000 mw and, according to an April 5 research report by Religare Capital Markets, plans to take it to 12,000 mw by the end of the fiscal.
Bharat Heavy Electricals, India’s biggest BTG producer, has a capacity of 15,000 mw and hopes to up it to 20,000 mw by March.Cetharhas in the past said that in the absence of a joint venture to make boilers, it has savings of 40% and can hence quote a lower price than its peers.
But the lack of a JV with an established overseas player has also worked to its disadvantage too since it was not allowed to bid for NTPC’s bulk order of 11 supercritical units of 660 mw each. “I have written to the power ministry about this and he said he’ll look into it,” said Subburaj, who founded Cetharin 1981.
The company reported revenues of Rs2,436 crore with an operating profit margin of 12% in 2010-11.
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