BGR Energy Systems raises Rs 190 crore

BGR Energy Systems Ltd, which is entering the capital market on December 5 with a public issue of 9.1 million equity shares, has raised about Rs 190 crore through pre-IPO placements.

The company, provider of ancillary equipment and turnkey engineering services to power projects, has made pre-IPO share placements to two private investors "" Citi Venture Capital and Reliance Mutual Fund.

Citi Ventures has picked up four per cent (28.80 lakh shares) at Rs 450 or issue price, while Reliance MF has taken two per cent (14.40 lakh shares at Rs 450). The pre-IPO shares will have a lock-in period of one year from date of allotment.

The company has a fixed a price band of Rs 425-480 per share for its initial public offering (IPO) scheduled to close on December 12.

BGR is tapping the capital market to raise funds for its expansion needs. It proposes to utilise the IPO funds to augment long-term working capital requirements, expand production capacity by setting up additional manufacturing facilities in India, China and the Middle East and other expenditure needs.

We have grown from manufacturing of power equipment to execution of EPC contracts, said B G Ragupathy, chairman and managing director, BGR.

He said the company's inhouse design capabilities has not given them the edge to be cost-competitive. BGR presently employs about 650 engineers to design and manufacture its products. BGR presently manufactures 40-50 per cent of equipment requirements in its power projects.

The Chennai-based company has projects worth Rs 3,330 crore on its order book and expects to complete about 90 per cent of these contracts by March 2009. BGR has executed balance-of-plant (BOP) power projects in Tamil Nadu and Rajasthan.