ICICI Ventures, Larsen & Toubro and IL&FS are in the race to acquire a 51% stake in NTPC-BHEL Power Projects (NBPPL) — the 50:50 JV floated to manufacture power equipment and pitch for EPC (engineering, procurement & construction) jobs from the power sector.
Indicating this, the Union minister of state for power, Jairam Ramesh, told ET: "The government intends to hand over the management control of NBPPL to a private strategic investor who will hold 51% stake and impart operational and managerial expertise to the venture. ICICI Ventures, Larsen & Toubro and IL&FS are in the race."
Mr Ramesh was in town to attend a boiler synchronisation ceremony of CESC's Budge Unit-3 (250 mw) on Friday. This unit is slated to be commissioned in a record 30 months and is likely to start commercial generation by June 2009.
Incidentally, NBPPL is incorporated in Noida with an initial equity base of Rs 5 crore and Mr CP Singh has been appointed chairman and MD. Mr Singh was director (engineering) at BHEL prior to this assignment.
Currently, BHEL and NTPC jointly hold 50% stakes respectively in NBPPL.
Once they collectively offload 51% to a private investor, the original twin promoters will hold 24.5% each.
BHEL's chairman and MD, K Ravi Kumar, told ET:
"There are three private firms in the race to acquire a majority stake in NBPPL but we are yet to take a final decision. The idea is to give them a management control."
"We have readied the business plan for NBPPL. According to plans, NBPPL will undertake three broad categories of business and it will be taken up in three phases," said Jairam Ramesh.
NBPPL will be investing Rs 6,000 crore in setting up the power equipment manufacturing units, which when installed will generate 5,000 mw annually by 2013. The capex is likely to be funded through a 70:30 debt equity ratio.
"In the first phase, the NTPC-BHEL JV will vie for EPC jobs for power plants in India and abroad. Under the plans, the EPC jobs will be alternately executed between BHEL and NTPC."
He further added that in the second phase, NBPPL will manufacture critical balance of plant equipment for power units, and in the final phase, it will set up a power equipment manufacturing plant. This plant will have a capacity to manufacture critical components — boilers and turbines.
Source: Economic Times
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