Hindustan Dorr Oliver, the engineering and design subsidiary of infrastructure major IVRCL Infrastructures and Projects Ltd, is likely to find a new investor in the form of Piramals.

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The group, with interests in pharma and property, is said to be engaged in talks with the promoters of the Hyderabad-based infrastructure company for either a possible stake sale or investment, according to two people familiar with the development.

Talks are at an initial stage and the Piramal group has shown interest in investing in Hind Dorr. A term sheet may also have been signed, one source said.

E Sudhir Reddy, Hind Dorr’s chairman, talking to DNA, denied the development. “It’s not correct,” he said.

The Piramals could not be reached for comment. The reasons for the group’s interest in the engineering outfit are not known.

Hind Dorr is an engineering, procurement and construction company with a facility at Vatva in Ahmedabad to manufacturing pressure vessels, heat exchangers, storage tanks and other proprietary solid-liquid separation equipments like filters, classifiers, thickeners, clarifiers etc.

It has been involved in major industrial projects in areas of mining and minerals, water & waste water, fertilisers & chemicals and pulp & paper.

The company also has significant presence in uranium ore processing. It supplied equipment to the first uranium mill in Jagududa in Andhra Pradesh and provided the complete uranium ore processing plant at Tummalapalle in the state.

The discussions are currently around valuation metrics, sources said. The Piramals are keen on working out the numbers on the basis of the Hind Dorr share price as the benchmark, while the IVRCL management has a different formula, primarily based on future valuation.

“IVRCL is unlikely to agree on an equity-based deal since it is working on improving Hind Dorr valuations by infusing funds and bidding for new and technology-based projects. It’s too early to say the deal has reached the final stage,” one person said.

Of the company’s equity, about 55% is held by IVRCL Infrastructure, while institutions, including foreign, hold 19% stake. The rest is widely held.“It is a long way for the deal to reach a logical conclusion. We should first wait for both the parties to agree for a common pricing formula,” the source said.