The Hindu Business Line : Expansion plans drive up Bilpower

Kolkata, July 26 Bilpower, which is in the midst of major expansion and capital expenditure exercises, today closed flat after Wednesday’s sharp gains. As the expected declarations to bourses regarding expansion after the board meeting did not come through, (except 5 per cent final dividend), the stock declined after touching almost Rs 200 intra-day and finished at Rs 193 on the BSE with a traded quantity of 1.51 lakh shares, against yesterday’s 1.47 lakh shares. On the NSE, the quantity was 82,413 shares.

Mr Ashish Bhagra, CEO, divulged to Business Line only the broad contours of the plans, but declined to give details.

The power engineering company’s board was to discuss a proposal to enter power trading, expansions of its transformer and stamping businesses as also consider a FCCB issue. The total capital expenditure in the next 15 months, including the on-going ones, is around Rs 140 crore, Mr Bhagra conceded.

In November 2006, it acquired Tarapur Transformer Ltd, now a subsidiary, at a cost of around Rs 10 crore. The transformer business is now being expanded (both green-field and brown-field projects) through this subsidiary at a cost of about Rs 43 crore. According to market sources, an acquisition is also on the cards.

For motor stamping, a new venture, Bilpower has planned a 2-phase capacity installation of 24,000 tpa at a cost of Rs 60 crore. Bilpower’s capacity of CRGO lamination of transformers is also being raised to 12,000 tpa at a cost of Rs 6.5 crore.

HT tower erection

The company is also geared to enter extra-high voltage transmission tower erection and cable laying businesses. It is understood to have begun due diligence for acquisition of one existing player in the field.

Mr Bhagra confirmed that the company was in the process of entering the new business in Maharashtra. He, however, offered no comment on the acquisition.

Regarding fund raising exercise, he said a number of options were being toyed with but no firm decision has been taken yet. The CEO also admitted that Bilpower has made the first few moves for registrations to formally enter the power trading business.

In the last three financial years, the company’s paid-up capital and non-promoter holding have gone up owing to privately placed warrants conversion to Rs 9 crore (Rs 5 crore) and 70 per cent (33 per cent) respectively. Promoters are now gradually raising their stake through market operations.

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