The Hindu Business Line : Hinduja group eyeing Kakinada refinery

Other opportunities
The group company would soon achieve a financial closure on the Vizag power project
The group had applied for unified telecom licence for 15 circles
It will announce its specific plans for real estate projects and hospitals next month

Our Bureau

Chennai, Oct. 29 The Hinduja group wants to take over the Kakinada refinery. The refinery is being put up by the public sector oil major ONGC and its subsidiary, Mangalore Refineries and Petrochemicals Ltd.

Mr Gopichand Hinduja, of the group’s promoter family, told journalists here today that the group was interested in picking up a majority stake in the company that would put up the Kakinada refinery. Gulf Oil Ltd, part of the Hinduja group, will be the company that would possibly buy shares in the company. Mr Hinduja said the group had a long-term (30-year) agreement for supply of heavy crudes.

Thanks to this, the capacity of the refinery could be doubled from the proposed 7.5 million tonnes a year, he said. He said the group was in talks with ONGC for the possible stake-take.

If the group takes over the refinery, it would be its second attempt to get into the oil industry in India. A decade back, the group was to tie up with Indian Oil Corporation for a 6-million tonne refinery in Orissa.

Mr Gopichand Hinduja and his brother, Mr Ashok Hinduja, who heads the group’s operations in India, were here in connection with the signing of an agreement between the group company, Ashok Leyland, and Nissan Motors for setting up joint ventures to produce light commercial vehicles and power trains.

In an informal chat with journalist on the sidelines of the signing ceremony, the Hindujas said the group was interested in pursuing opportunities in the power sector, real estate development, healthcare and insurance and telecommunications.

The group has given up ambitions to be present in the aviation sector and is not interested in other new businesses such as retailing.

Vizag power project

Mr Gopichand Hinduja said the group company, Hinduja National Power Corporation Ltd, would soon achieve a financial closure on the 1,040-MW Vizag power project. The project is estimated to cost Rs 5,000 crore. It was one of the ‘fast-track’ projects that were conceived in the early 1990s with sovereign guarantee, but like the other fast-track power projects, did not take off.

The Hinduja group is now reviving the project. Mr Hinduja said it would be a merchant power project, which would sell 75 per cent of the power generated in the spot market. The other 25 per cent would be sold to Andhra Pradesh.

“At an appropriate time, we will divest 49 per cent in the company,” Mr Hinduja said.

Telecom licence

As regards telecommunications, Mr Ashok Hinduja said the group had applied for unified telecom licence for 15 circles and was awaiting word from the Government. “Once we get the licence, we will announce our strategic partner,” Mr Hinduja said.

Come November, the group would also announce its specific plans for real estate projects and hospitals. All that the Hindujas were willing to say today was that the group had plans for a clutch of real estate projects in Bangalore, Hyderabad and Chennai. It is the group’s intention to put hospitals across the country, totalling 5,000-beds.