BHEL to spend Rs 5,000 cr on JVs

Power equipment manufacturer Bharat Heavy Electricals Ltd (BHEL) is likely to spend nearly Rs 5,000 crore over the next three years in its yet-to-be-formed joint venture companies with power utility NTPC and Nuclear Power Corporation of India Ltd (NPCIL).

"Some of this money will also be spent on other possible ventures with private sector companies," said BHEL Chairman and Managing Director K Ravi Kumar.

BHEL and NTPC agreed to form a joint venture in September last year to construct power plants and also manufacture power equipment. Kumar said the new company was likely to be formed by next month. The proposed company will take up projects both in the country and overseas.

A joint venture with NPCIL is also likely to be formed in the "first half of the next financial year," Kumar said. The joint venture is likely to take up engineering, procurement and construction for nuclear power plants in India and overseas.

NPCIL, which is the only company mandated to set up nuclear plants in India, currently generates about 3,900 Mw of electricity from its 16 power plants. The company plans to more than double its capacity to 10,000 Mw over the next six years.

BHEL has supplied almost 80 per cent of the nuclear power equipment currently used in the country.

The company, in which the government owns 67.72 per cent stake, is also looking to buying a mid- to small-sized company for which it has Rs 1,000 crore.

"We are talking to many companies in India and overseas," said BHEL finance director CS Verma. BHEL is looking primarily at companies in the US and Europe, another company official said.

He added that the company, which has cash reserves of over Rs 4,000 crore, would fund these investments through its internal accruals. It recorded a net profit of Rs 1,749 crore in the first nine months of the current financial year, up 38 per cent over the same period the previous year.

BHEL today also paid an interim dividend of Rs 298 crore to the government for the current financial year, taking its total interim dividend to Rs 441 crore, which is 90 per cent of its enhanced equity capital post-bonus, Kumar said.

The company has an order-book worth Rs 78,000 crore. It currently has a manufacturing capacity of 10,000 Mw per annum and plans to expand it by another 15,000 Mw over the next two years.