Indsil plans Rs 140-crore expansion in Kerala

Coimbatore"�based Indsil Electrosmelts Ltd (IEL), a player in specialty alloys and power generation, has drawn up a Rs 140-crore expansion plan for Kerala.

Of the Rs 140 crore that the company has earmarked for the projects, Rs 100 crore is expected to come through borrowing from banks.

While half of the remaining Rs 40 crore would be raised through internal accruals, the rest would be met through undisclosed private equity investors, with whom the company is in talks with.

Speaking to Business Standard, IEL executive director Vinod Narasimhan said that the company had recently acquired a controlling stake in a consortium to develop small hydro-electric power projects with a combined capacity of 20mw across four locations in Kerala.

IEL already has a 21-mw power project in Idukki district of Kerala. "We are planning to begin the implementation of one project located at Pathanamthitta district with a capacity of 3.5mw. We expect to start the work by the end of 2006," he added.

The company individually bid for the rights to develop a 2.5-mw project in Kannur district of Kerala, recently.

This apart, IEL is expected to be shortlisted for developing three more projects with a combined capacity of around 30mw in the state.

Explaining the reasons for choosing the state, Narasimhan said: "Since we are already familiar with the geological conditions and the governmental norms in the state, we plan to confine our operations to Kerala alone and not take the risk by entering newer, unfamiliar markets."

The project development work would take around 30 months from the beginning of 2007 and full-scale commercial power generation is likely to begin by the end of 2009.

With the completion of all the planned schemes, the company would have a hydro-electric power generation base of over 230 million units, yielding an income of over Rs 80 crore per year in 2009-10.

Commenting on the usage of power to be generated from these projects, Narasimhan said that about 50 per cent of the hydel capacity would be used for captive needs. The rest would be positioned with sale of power to other licencees in the state or third parties.

The company posted a 73 per cent increase in its net profit to Rs 2.37 crore for the quarter ended June 30, 2006. Net sales for the quarter stood at Rs 17.51 crore compared with Rs 15.34 crore in the corresponding quarter last year, registering a 14 per cent increase. For the year ended June 30, 2006, the company's net profit stood at Rs 7.35 crore and net sales stood at Rs 57 crore.