Bharat Heavy Electricals Ltd (Bhel) plans to acquire Bharat Heavy Plates and Vessels Ltd (BHPVL) to augment its power-equipment manufacturing capacity.
Deal to buy Vizag power-equipment firm expected by next yearNEW DELHI: Bharat Heavy Electricals Ltd (Bhel) plans to acquire Bharat Heavy Plates and Vessels Ltd (BHPVL) to augment its power-equipment manufacturing capacity, Bhel acting chairman and managing director K Ravi Kumar said on Friday.
“We are talking to them for an acquisition. We expect a decision by the first half of the next fiscal year (beginning April 1),” Kumar said, adding that Bhel will probably acquire the entire company, depending on various factors.
The Visakhapatnam-based BHPVL manufactures combustion systems, including industrial boilers and fired heaters, cryogenic systems, multi-player vessels, LNG import terminals and other utility systems to be used by power-generation units.
Kumar said Bhel is looking for more domestic acquisitions in the engineering space. “We are looking at acquisitions worth Rs 300-400 crore each,” he said.
India plans to add about 78,000 mw of electricity in the 11th plan period. The country currently generates 1,41,000 mw of electricity annually through the use of coal, water, gas and other means.
Kumar also said that Bhel will spend Rs 4,200 crore to augment its capacity to make equipment to generate 15,000 mw of electricity by 2009, from the current 10,000 mw.
Earlier last year, Bhel had said the company would spend Rs 3,200 crore for such expansion.
“All the investment will come from internal accruals,” Kumar said.
Bhel is in talks with the NTPC Ltd and other power utilities to secure orders for equipment capable of generating 2,000 mw of electricity generation, Kumar said.
“We will likely secure the orders by April this year,” he said.
Bhel’s current order book is valued at Rs 82,000 crore, which is to be executed over the next three years, Kumar said.
The company is also exploring international markets like West Asia and Africa for selling gas turbines and transformers.
“We have recently got some contracts from Sudan (Africa) at coal-based plants,” Kumar said referring to transformers.
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