State-owned heavy engineering company Bhel is looking at technology-based acquisitions in the remaining years of the XIth Five Year Plan (ending March 2012).
State-owned heavy engineering company Bhel is looking at technology-based acquisitions in the remaining years of the XIth Five Year Plan (ending March 2012).
Ravi Kumar, chairman and managing director, Bhel, said the company will look at acquisitions only if they add to Bhel’s technological expertise.
“Inorganic expansion for the sake of returns is not what the company is pursuing.” He did not disclose the value of acquisition that the company would be comfortable with.
Kumar said the company has set aside Rs 10,000 crore for organic and inorganic expansion in the current five year plan.
In the power segment, where the company manufactures boilers, turbines and generators, Bhel favours long-term collaborations over acquisitions to increase capacity. “We are increasing our capacity to 15000 mw in the current year and will take it up to 20,000 mw organically by 2012,” he said.
For all other segments, it will either look at acquisitions or joint ventures.
Bhel currently offers products and services in the power, industry, transmission, transportation and non-conventional energy segments.
Kumar said the company is expecting an order inflow of Rs 55,000 crore in the current year of which 75% will be from the power sector. The remaining will come from the industrial segment. At the end of the first quarter, the company had an outstanding order book position of Rs 1,24,000 crore.
He said the order bookings under the XIth five year plan are already complete and Bhel has also taken up 10,000 mw of orders for projects coming up in the XIIth five year plan.
“Only orders related to gas turbines, which have smaller execution cycles, are being accepted for delivery under the XIth plan,” he said.
Bhel is currently importing gas turbines from US-based power equipment company GE. “The tie-up with GE is for technology sourcing wherein we are importing the machinery and the remaining add-ons and the civil work etc is being done indigenously,” Kumar said.
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