Punj Lloyd set to sell engineering arm stake

Infrastructure company Punj Lloyd Ltd plans to divest part of its holding in Punj Lloyd Engineering Ltd, and is hoping to “shortly” rope in an equity partner for the engineering subsidiary, director corporate affairs Luv Chhabra said.

“To grow the (engineering) business, it has to be made independent. Shortly, we will have an equity partner in Punj Lloyd Engineering,” Chhabra said.

Punj Lloyd had set up its engineering subsidiary two years ago to undertake captive engineering work of the parent.

“With 800 engineers, Punj Lloyd Engineering already has a critical mass. We see the company growing to 5,000 engineers in the next three to four years,” Chhabra said.

Punj Lloyd Engineering has already started taking contracts from other companies, and Chhabra sees it emerging as a “high end value-added outsourcing company”.

“In fact, many of our competitors take Punj Lloyd Engineering’s services at an arm’s length basis. Today, 15% of their orders are from outside Punj Lloyd,” he said.

The bourgeoning of the engineering arm is symbolic of Punj Lloyd’s accent on technology and finesse, traits that distinguish the company from most others, said Chhabra, a hydrocarbons veteran who has been with the company for nearly a decade.

“While energy continues to hold the leading share in our order portfolio, roads and highways will also be a major thrust area in India,” Chhabra said.

Punj Lloyd, which has executed two build-operate-transfer highway projects in the country, is keen to acquire controlling stakes in road projects, he said.

Chhabra said Punj Lloyd will also tap the renewable power market. Besides, a booming Indian market, the company expects a revival in West Asia, which may take order flows during the current year to the peak seen in 2007, Chhabra, said.
NW18