BHEL & NPCIL To Name Third Partner In JV

Bharat Heavy Electricals Ltd., India’s biggest power equipment maker, and Nuclear Power Corp. of India may name an overseas partner by October for a venture to build atomic plants in the country.

“We have zeroed in on a European partner from two with whom we were talking,” Bharat Heavy Chairman K. Ravi Kumar said in a telephone interview in New Delhi today, without naming the overseas company. “The partner will be offered about 30 percent equity. We are still negotiating some terms.”

Bharat Heavy agreed in April last year to form a venture with the country’s monopoly nuclear power producer to provide engineering, procurement and construction services. India plans to increase its installed atomic generation capacity 10-fold to 40,000 megawatts by 2020 after a global ban on nuclear trade with Asia’s third-biggest economy was lifted last September.

“Nuclear energy is in a nascent stage in India and such a partnership will help it get a first-mover advantage,” said Shruti Udeshi, an analyst with Finquest Securities Ltd. who has an “outperform” rating on Bharat Heavy. “For the stock, it would be just a broad trigger.”

Bharat Heavy gained 0.6 to 2,224.60 rupees in Mumbai trading. The shares have gained 63 percent this year, compared with a 66 percent increase in the benchmark Bombay Stock Exchange Sensitive Index.

Initial Talks

Bharat Heavy had initially begun discussions for a partnership with Alstom SA, Siemens AG, Skoda Power, a part of Skoda Holdings AS, and Russia’s OAO Power Machines before shortlisting two of them, Kumar said. The partner will be “one of them,” he said.

Phone calls to Rachana Panda, country communications director for Alstom India, were unanswered, while Shirley Burla, a spokeswoman for Siemens India, didn’t immediately respond to an e-mailed query seeking comment. Ranjit Nair, who heads the Skoda Power sales team in India, couldn’t immediately be reached at his office in Noida near New Delhi.

Bharat Heavy and Nuclear Power hold 50 percent each in the planned venture and will sell equal stakes to the overseas partner, Kumar said. The venture is yet to be named, according to Rohit Singh, a spokesman for Bharat Heavy.

S.K. Jain, chairman of state-owned Nuclear Power, couldn’t be immediately reached on his mobile phone and calls to the Mumbai office of N. Nagaich, a spokesman, were unanswered.

Nuclear plants planned by India can generate more than $10 billion of orders for Indian companies such as Bharat Heavy and Larsen & Toubro Ltd. by 2012, UBS AG estimated in July last year.

Nuclear Power said in March it will borrow 3 billion euros ($4.4 billion) in overseas debt to fund a project to be built in partnership with Areva SA, the world’s biggest maker of atomic reactors. The project at Jaitapur in western India will be the country’s first large-capacity plant using overseas equipment after the nuclear-trade ban was lifted last year.


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