From what I understand BHEL needs to execute 3-4 supercritical unit orders(they did win orders of around 10 units last yr) to assimilate the technology. Right now they will be paying royalties to Alsthom so margins will be lower than for smaller MW boilers. Similar scenario existed when BHEL initially upgraded from 200-300 MW to 500 MW technology. Now BHEL is very competitive in the sub 500MW boilers and can more than match foreign players.

“Foreign forpower 12thand 13thFive mostBTG ** leadto ** tenders” **

Some critical lessons there.

Given the current state of economy and the order book of BHEL (around 100000 cr) what do you guys think about the business prospects for the next 2 to 3 years. I invested around the same time Hitesh started this thread and was always optimistic about the future but now it looks like it may take longer time to turn around than what was expected. Any thoughts from seniors?

Nobody can predict when the turnaround will exactly happen.

Best to buy and sit tight now.

When the upmove comes it will compensate for pateince.

Even stuff like crompton greaves n larsen look good.

company was represented by V Prasada Rao, CMD and Bajpai, Director Finance.

Key takeaways of the conference call

Order backlog as end of Dec 2013 is Rs 100600 crore of this 83% is power sector orders, 10% industrial and balance 7% is exports. Order intake for 9mFY14 Rs 11666 crore (or 2280 MW ) consisting power sector orders were Rs 7953 crore (or 1500 MW) and Industrial of Rs 3601 crore (or 780 MW) and balance are exports.

The company is L1 in case of 3X660 MW North Karanpura power project EPC order of NTPC. This order signals the demand of power utilities seeking beyond supercritical operating parameters while placing the equipment supply orders. The company has also bagged ESP order for Shapurkandi HEP. In addition the company is also favorably placed for orders worth 2GW apart from North Karanpura.

Execution of orders continue to be slow. Barring public sector orders others are going slow due to customer side issues ranging from delay in getting clearances, opening of LC and payments etc. Bara project of Jaiprakash Power, Monnet Ispat are the order that are going slow. Visa Project is not at all moving. Even the Bajaj Hindustan order is also going slow to some extent. Of the total order backlog slow moving orders accounts for a share of about 20-24%.

There are 17 GW worth of orders in various stages of finalization largely in SEB segment. Activities of central and state PSU are picking up and it will take at least 12-18 months for the industry to see the impact of the same.

Orders under various stages of finalization are 3X660 MW North Karanpura and 2X800 MW Darliapalli power project of NTPC. Similarly EBoP order of Rahunathpu (2X660 MW) and 2X190 MW of Prahnita HEP in AP where the company is also L1. Apart from this tenders are submitted and pursued for projects with an aggregate capacity of 4500 MW and handful of private projects for which the negotiation is going on. For projects with aggregating capacity of another 9400 MW for which tenders are likely to be submitted by March. Of the total 17 GW orders worth 7700 MW will be finalized by March 2014 and the finalization of 9400 MW will happen only in FY15.

Collection has improved and the debtors as of Dec 2013 are lower than the year opening levels. Drs to be collected are Rs 21000 crore and of which about 50% is more than one year.Capex for FY14 is Rs 1000 crore.

There is no provision towards BHPV like last quarter. Contractual obligation for the quarter is less by Rs 146 crore for the quarter and for 9mFY14 it is less by Rs 360 crore.

Decision making in Railways is getting delayed affecting both locomotive orders as well as commencement of work on Bhilwara Plant.

Initial signs of rebuilding confidence among industry could be seen. Macro environment green shoots are also appearing with GOI unleash various measures to address the issues of power sector.

The above****Key takeaways of the conference call were by Capital Mkt.

Company was B Prasada Rao, CMD; Bajpai, Director Finance & WVK Krishna Shankar, Director (IS&P).Key takeaways of the conference call by Capital Mkt;

Order inflow/booking for the QE Sep 2014 was Rs 14078 crore compared to Rs 4470 crore in the corresponding previous period. Of the order intake about Rs 12111 crore is power sector orders, Rs 2248 crore is industrial orders and balance are international orders. Major power sector order bagged during the quarter are Rs 3536 crore EPC order from Gujarat State Electricity Corporation for 1X800 MW Wanakbori power project, RS 7800 crore order from TANGEDCO for Ennore SEZ.

Order backlog as end of Sep 2014 stood at Rs 103700 crore and of which 85% is power sector orders, 7.5% industrial orders and balance 7.5% is international orders.Sharp fall in other income for the quarter ended Sep 2014 is largely on account of forex loss of Rs 27 crore compared to forex gain of about Rs 188 crore in corresponding previous period. In the other hand the interest income has went up by Rs 151 crore compared to corresponding previous period.

There is marginal decline in receivables from Rs 39952 crore to Rs 36629 crore with traction in payments from private IPP players.The company resumed execution in Jaiprakash and Lalitpur projects as the concerned IPP’s start making payments. So the slow moving orders of 12000 MW stated earlier have now come down by 3000 MW. However the cancellation of coal blocks has brought uncertainty to significant part of order book of the company. Of the 224 captive coal blocks about 89 blocks pertain to power sector. Of the 89 blocks in 42 coal blocks BHEL have exposure as equipment supplier for linked power projects. Of the 42 coal blocks the projects linked to 20 coal blocks are completed. In case of another 14 blocks the linked power projects with an aggregate capacity of 15000 MW are in various stages of execution from 10% completion to 90% completion. Moreover in case of other 8 blocks with linked projects with an aggregate capacity of 8000 MW are in various stage of awarding contracts. And these last two segments is now a concern for the company. However the company expects the uncertainty will go off by end of fiscal as the GoI is expected to reauction coal blocks by end of this fiscal.

BTG order finalistion for industry as a whole in H1FY15 is about 5000 MW and the company is still confident of 15000 MW of order finalization to happen in FY15. The company is L1 in 1000 MW hydro power project in J&K. Similarly the company is L1 in Udankudi Project of TANGEDCO. The company got LOI for 1X525 MW Tuticorin project in TN.The BTG+BoP supply package for 4X660 MW Barethi STPS power project as well as the EPC contract for 2X660 Khargone STPS is expected to be finalized by NTPC within this fiscal. The company is in negotiation with Telengana Government for 6000 MW on nomination basis and expects significant part of it to get finalized within this fiscal. The land for 6000 MW is identified and the land alienation is in progress.

Lower volume continues to exert pressure on margin. The employee count has reduced to 46015 persons as end of Sep 2014 compared to 47525 people as end of March 2014. Another 8000 people will get retire in next 4 years. The company is not making any major fresh recruitment.Provision for the quarter ended Sep 2014 was - Rs 40 crore and for corresponding previous period was Rs 662 crore. For H1FY15 its Rs 11 crore as against RS 989 crore in corresponding previous period.

Higher per MW rate for Ennore SEZ order compared to North Karanpura project is largely on account of scope difference as the civil contract component is higher in case of Ennore SEZ project as its being put up in ashpond of old TPS and scope difference in water intake and others.

Co was rep by B Prasada Rao, CMD; P K Bajpai, Director (Finance) & WVK Krishna Kumar, Director (IS & P).Key takeaways of the call BY Capital Mkt;

Outstanding order book position as end of Dec 2014 was Rs 103900 crore compared to Rs 103700 crore as end of Sep 2014. For 9mFY15 the order intake is about Rs 20719 crore, a rise of 78%yoy. Of the total order intake power sector orders is worth Rs 17392 crore balance are accounted by industrial systems and international orders. Of the total order book about 85% is power sector orders and 7% industrial systems and balance are exports.

Traction in execution is yet to be seen as stalled orders barring Jaiprakash and Lalitpur Power has not yet reviewed. The uncertainty created by cancellation of captive coal blocks has not yet solved even though e-auction of coal blocks commenced. Next year will see traction in execution if the e-auction gets completed and blocks allotted by end of current fiscal. Then only the 15000 MW orders in the books which are impacted by the coal block cancellation will start moving. Even if the developers did not bag the coal mines in the e-auction, that projects will be picked up by others as huge investment is made in all these projects.

Unlike earlier expectation of 15 GW of orders to get finalized in FY2014-15, only 12-13 MW is happening. Until 9mFY15 about 7000 MW is finalized and the fourth quarter another 6000-7000 MW is expected to get finalized.

The company is L1 in order worth Rs 8000-9000 crore including Udankudi. Further the company has signed MoU for 6GW worth of projects and out of that atleast 50% will get finalized within this fiscal and balance in next fiscal. The company already bagged one order from Telenganagenco and expects the Manguru and 1200 MW Nalgonda project to happen soon. The state is in the process of identifying land for Nalgonda project. Sees finalization of 2000-3000 MW of hydro projects get finalized.

Indigenous nuclear programme and the company is vendor for steam generator and that will continue. The US technology based project are little faraway as some more issues are to be settled out.

The company signed MoU with Hindustan Shipyard for submarine orders. It is too early to put a number in case of this new opportunity. However the scope for the company is right from hull to electro magnate generators and controls.

The company which is already supplying 76 MM guns is shortlisted to supply 30 mm guns and 127 mm guns as well. The orders for both 30 mm guns and 127 mm guns will get finalized next fiscal. The orders are expected the requirement for 127 mm gun will be about 3-4 guns a year depending on the vessels delivered/built.

Export markets for utility orders: Have some licensing restriction for certain geographies but those market are currently not active and it's saturated. In case of Africa, which is very active the company face the issue of financing. The company has already represented this issue to GoI and expects some solution. Second key issue is qualification criteria as the tenders insist on execution experience in certain geographies etc.

Bangladesh â as NTPC is putting up the project the company has got qualified.

Forex loss for the quarter is RS 19 crore.

Provision hasn't increased and for 9mFY15 it has actually came down to Rs 360 crore from about Rs 1189 crore in corresponding previous period.

The 480 MW Solar PV project is yet to be cleared by GoI and the capex will be Rs 2400 crore.

APGENCO projects are no more slow moving as the issue of non working BoP contractors is sorted out. NTPC's Raghunathpur is a issue but its Bongaigaon project is moving. All other IPP orders are not moving or slow moving only.

Tuticorin TPS â customer is already committed but order will be placed only after TNERC clearance is obtained. In case of Udankudi, the company is L1 and TANGEDCO is waiting for the court case to get over.

About 2000 people got retired and currently the manpower strength is 45536.

CONFERENCE CALL - from Capital Markets

Bharat Heavy Electricals

Focus on expedite execution of projects

Bharat Heavy Electricals hosted a conference call on Feb 11, 2016. In the conference call the company was represented by Atul Sopti, CMD and T Chokkalingam, Director Finance of the company.
Key takeaways of the conference call

Order book as end of Dec 31, 2015 was Rs 109201 crore. Orders worth Rs 3646 crore, which are not likely to commence have been excluded from the outstanding order book.

Ordering activity in power sector has pickup albeit by government sector. Order intake for the quarter ended December 2015 was Rs 6037 crore (or 1810 MW) of which power sector orders were Rs 5124 crore and industrial is RS 961 crore and industrial sector orders were Rs 961 crore. Order intake for 9mFY16 was Rs 28096 crore. The company is confident of closing this fiscal with an order intake of Rs 35000 crore.

The company is favourably placed for 9 GW of orders and of which orders worth about Rs 8000 crore expected to materialize within next 45 days. These orders are largely 2X760 MW Uppur Thermal power project from TANGEDCO, 525 MW Tuticorin project of SPIC Electric Power Corporation (SEPC) and 1X250 MW of Rourkela power project.

Of the 9GW where the company is L1 includes 1000 MW Pakhadul Hydroelectric Project from Chenab Valley Power, 4X660 MW Barethi STP of NTPC, 1X660 MW Bhusawal TPS of MAHAGENCO and 4000 MW Pudimadaka power plant of NTPC in AP.

Of the Rs 3646 crore worth of order excluded from other book barring one all other are export orders.

In Q3FY16 the company has reviewed five projects that are stalled for a while. The aggregate unexecuted order book of these five projects is Rs 2000 crore. These five projects include GVK Gobinwal, Nashik Power project of Rattan India Power, Jhabua Power and Pranhita Power projects.

Provisions of Rs 1088.38 crore towards net dues & Rs 98.21 crore towards Work in progress/Finished goods inventory have been made in the results in respect of project on hold. The company has formulated a policy to review the project on hold. The decision to provide for will be taken up after considering factors such as ageing of the order, type of client, sovereign guarantee on the projects etc The Company expected the project on hold will review and has in-fact reviewed some of the projects during Q3FY16. But some could not be reviewed and dragging and thus the company provided for now.

Hence forth the company will do periodic review of its old projects. However no major provisions are expected in Q4FY16 as things stand today.

Of the order backlog the share of stalled or projects not got start letter are about Rs 32600 crore as end of Dec 2015.

Receivables as end of Dec 31, 2015 stood at Rs 35881 crore and of which about 50% are deferred and collectable once mile stone activity is crossed. The rest is collectable and of which more than one year is roughly about Rs 10000 crore.

Awarding of Pudimadka project by NTPC may slip to next fiscal as NTPC is yet to take a call whether the plant to be on import coal or domestic coal. However, the awarding of Barethi might happen in FY2016 itself if everything goes well.

The increase in material cost is largely due to JDU clause as well as mix change with share of EPC going up. Further when volume goes up the company will get better procurement price in case of raw material.

The environment clearance for 5X800 MW Telengana project will be obtained by the client in next 3-4 months as there is change in plan and new EIA has completed.

Is it a value buy or a value trap now?

I see the Total CA, Loans & Advances is 64,030.39 Cr and Total CL & Provisions is 34,850.08 a current ratio ~1.83. Net current asserts is 29,180.31 Cr. On a share capital of 244.76 Cr, it translates into 119/- per share. As per Graham is (119*2/3= ~80) should be the price to get a Margin of safety The current price is 94.
All calculations are based on Consolidate balance sheet on moneycontrol. Don’t know what the Contingent liabilities are and why it is such a big number

CONFERENCE CALL - from Capital Markets

BTG market for FY17 to be flat at 12GW

Bharat Heavy Electricals (BHEL) held a conference call on May 27, 2016 to discuss the performance of the company for the quarter and fiscal ended March 2016. In the conference call the company was represented by its Atul Sobti, CMD, Amitabh Mathur, Director (Industrial Systems & Products) and Chokalingam, Director Finance.

Key takeaways of the conference call

  • Order backlog as end of March 31, 2016 was Rs 110730 crore. Of the total order book about 87% is power sector orders, 6% industrial orders and 7% is exports. Of the total order book 33% is EPC orders and 67% is BTG.

  • The company during FY16 has excluded orders (worth Rs 7429 crore) which are not likely to commence from the order backlog. The company has excluded order worth Rs 3783 crore in Q4FY16. The order excluded in Q4FY16 was the DB Power’s 2X660 MW Singrauli Power Project. The orders excluded from order book during Q3FY16 were largely international orders i.e. the Rs 1800 crore worth Jindal order in Africa, the Iraq order, the Senegal order.

  • Order intake during Q4FY16 was Rs 15652 crore, a jump of 55% from Rs 10095 crore in the corresponding previous period. Order intake in FY16 was up by 42% to Rs 43727 crore from about Rs 30814 crore in the corresponding previous period.

  • Expect same level of order booking in current fiscal. The company is currently L1 or favorably placed for orders with a generation capacity of 12000 MW and of which about 7000 MW is expected to be placed during FY17.

  • The 525 MW Tuticorin project of SPIC Electric Power Corporation (SEPC), the North Chennai TPS extension project, the UPPUR TPS project all in Tamil Nadu and the NTPC’s Karimnagar project in Telengana have all moved to the order book during the FY16.

  • Order where the company is either L1 or favorably placed are the 4X660 MW Barethi STP of NTPC; 2X660 MW Udangudi TPS of TANGEDCO in Tamilnadu, the 4x1000 MW Pudimadaka Project of NTPC; the 1X660 MW Bhusawal TPS of MAHAGENCO and the 1000 MW Pakhadul Hydroelectric Project from Chenab Valley Power Projects in J&K. The company expects the Palamuru – Ranga Reddy lift irrigation project in the state of Telengana is expected to get finalized soon.

  • In case of Barethi the environmental clearance for mines was the issue and now with coal linkage approved for this project NTPC is applying for fresh environmental clearance and the project awarding is expected soon. Udangudi project contract awarding got delayed due to state elections in TN and with election over by now the company is in discussion with TANGEDCO and the order finalization /awarding will happen soon. The Pudimadaka project for which the bid opened in August 2015 the company is in discussion with NTPC and expects things are expected to move shortly. Order finalization of the Palamurur lift irrigation project is expected soon. The bids for Panki opened in April 2016 and things are expected to progress.

  • Utility grade BTG market size in the country was 8 GW in FY15 and 12 GW of FY16. The market size in FY17 is expected to be at same level of last fiscal. The market size of 12 GW expected for FY17 excludes UMPP orders and that will be inadditon to the 12 GW if finalized.

  • About 5000 MW (unexecuted portion is Rs 2800 crore) has started moving from non-moving/stalled in last fiscal. Out of current order book of 110730 crore, orders worth Rs 50000 crore are stressed project. Major junk of this stressed order book of Rs 50000 of the company spread over three projects i.e. Ennore (Rs 9000 crore), Yadagiri (Rs 17950 crore) and Bhadradri TPS at Manuguru (Rs 5000 crore). If these 3 projects start moving the stressed project portion of the current order book will be minimal.

  • Ennore Project – The Company has started work on getting the order but was forced to stop due to case in the court. The hearing at Supreme Court is over and the company has already submitted its final repl. The judgment is expected immediately after the vacation.

  • As far as the 5X800 MW Yadagiri project is concerned, the company even though has not made any financial commitment has commenced engineering design work once the term of reference is obtained. Public hearing is scheduled on May 31, 2016 and the environmental clearance is expected after wards.

  • The 4X270 MW Bhadradri/Manguru TPS is currently stalled for want of environment clearance. The TSGENCO is closely following the Ministry of Environment and that is expected to start moving once the clearance in place. However the 800 mw TSGENCO project is moving on fine.

  • Wage revision is due only Jan 1, 2017. So the staff cost is expected to remain flat for current fiscal.

  • The 525 MW Tuticorin order of SEPC is only for BTG supply.

  • Now things are changing and many projects booked are not with JDU clause. About 7 unit orders booked in FY16 are without JDU.

  • Prices in recent prices were driven down due to competitive environment as well as efforts of the client for design optimization. Optimization in design wanted by client driving cost prices by and large settled.

  • Receivables as end of March 31, 2016 was Rs 35607 crore and advances was Rs 10000 crore. Receivables net of advances from stressed projects is Rs 2139 crore.

  • At Bangalore the company is embarked on brown field expansion of PV cell and solar module mfg capacity from current 26 MW to 226 MW. The capex cost will be less than Rs 300 crore.

  • Neyveli order two packages – TG amd SG order. The company is not well placed.

  • Exchange variation gain is Rs 123 crore for Q4FY16. Rs 356 crore is exchange gain for FY16. This is accounted part of other income.

  • Hydro company SJVNL is thinking of a thermal project in Bihar. Atleast 2-3 UMPP projects are expected to be finalized within this fiscal. Cheyyur clearance is already there.

  • Global installation of BHEL manufactured sets now stands at 170 GW

  • Reduction in level of operation and provision is the reason for yoy decline in PBT.

1 Like

Has this bottomed out considering the last quarter results, robust management commentary and general improvement in economy?

This looks to me next MTNL/BSNL.
Incremental energy generation is through Solar/Wind and they don’t have great capabilities there.

Order book is shrinking and they are not able to control their cost structure (being a PSU). Don’t think there will be any significant addition of thermal fired plants where big scale boiler orders used to come from.

Edelweiss on BHEL Downgraded to ‘Reduce’ from ‘Buy’; cut target price to Rs 60 from Rs 85. Unlikely to generate revenue growth beyond 6-8 percent over next five years. Balance sheet and cash flow unlikely to revive with SEBs accounting for 50 percent of receivables. New opportunities unlikely to be a game changer.

Read more at:
Copyright ©️ BloombergQuint

How rosy the picture looks like at rs.22 a company with book value of 87.?
I want opinions on does it becomes another MTNL OR BSNL? And how disinvestment story will pan out i mean what could be the possible scenerios?

Disc. Invested today

The ongoing economic disruption across the world, due to Covid-19 has highlighted the dangers of manufacturing activities being concentrated in a single location and thrown up the need for diversification of supply chains and manufacturing. This has thrown up a huge opportunity for India - one of the fastest growing economies of the world and an attractive investment destination which offers strong democratic governance, a well-established judicial system, a young work force, one of the largest domestic markets and favourable investment policies.

In order to further promote Make in India and support international companies for setting up manufacturing in India, BHEL has floated an Expression of Interest (EOI) inviting global companies to partner with it and leverage its facilities and capabilities for setting up a manufacturing base in the country. BHEL, a Maharatna CPSE under the Department of Heavy Industries, has 16 state-of-the-art manufacturing facilities spread across the country with substantial land bank as well as extensive built up industrial/ commercial and residential spaces. It’s manpower strength of about 34,000 includes 9,000 engineers with qualifications and experience in cutting edge technologies. It has 16 Centres of Excellence (CoEs) in varied areas such as Computational Fluid Dynamics, Intelligent Machines & Robotics, Machine Dynamics, Nano Technology, Power Electronics, Ultra High Voltage, Advanced Transmission, Control & Instrumentation, Surface Engineering, Coal Research, Advance Fabrication Technology, etc. and 5 Specialised Research Centers - Welding Research, Ceramic Research, Electric Traction, Pollution Control etc. It has ongoing technology partnerships with some of the major global manufacturing and engineering companies as well as relationships with leading national laboratories & institutions.

These facilities & capabilities along with its tie ups put BHEL in a strong position to support any international company, in setting up a base in India and taking forward the vision of our Hon’ble Prime Minister.


The power sector woes & general negative sentiment towards PSUs have put BHEL stock under pressure & has thus witnessed a prolonged downfall in the last decade.However it was going great guns a decade ago riding on the cyclical uptick and near-monopoly in the sector till the competition started creeping in thereby resulting into obvious reduction in net profit margins over the subsequent years, as it is visible from the following chart :

Increased competition and the inability to cope with technological advances effectively must have played on over the investor’s sentiment resulting in such longevity of the stock price deterioration.

However as @Kuldeepjadeja rightly pointed out, the disruption caused bay Covid-19 pandemic could throw many opportunities in India as the government emphasizing on making the country a mainstream part of the global supply chain. In accordance with that, just when global majors are looking to diversify their supply chains, BHEL has floated expressions of interest to woo international companies to set up manufacturing in India.

The management regime under its new chairman seems to be on the right track as far as deriving the value from hitherto underutilized assets of the company is concerned. They are taking many such initiatives ( to woo the foreign partners) such as: to maintain, develop & utilize 16000 plus acres of land spread across the major destinations in the country into integrated manufacturing facilities; creating a lithium-ion cell manufacturing facility for use in electric vehicles and energy storage; enhancing capacities in manufacturing heavy electrical equipment; to foray into manufacturing LCD panels for TVs and mobile phones; expanding in the solar value chain by adding polysilicon refining and wafer & ingot manufacturing, etc.
Should such planned initiatives fructify, that could turn out beneficial for both foreign partners(by way of reduced time & resources to set up manufacturing facility) and BHEL(by way of utilizing its idle factories and employees). Though there are risks associated with the slow pace of divestment & stressed Indian thermal power market, this asset monetizing exercise should help BHEL to unlock the value of its idle assets to good effect to achieve the much-awaited phase of growth.


Make In India :

BHEL bags maiden order for battery energy storage systems

The company has signed a contract agreement with TERI for setting up of a cumulative 410 kWh Battery Energy Storage Systems (BESS) in the National Capital Territory (NCT) of Delhi, it added.

State-run engineering firm BHEL on Friday said it has bagged its maiden order for battery energy storage systems from TERI.

However, the company did not divulge details about the value of the order.

“Amidst stiff competitive bidding, BHEL has won its first commercial order for state-of-the-art Battery Energy Storage Systems from The Energy and Resource Institute (TERI),” BHEL said in a statement.

The company has signed a contract agreement with TERI for setting up of a cumulative 410 kWh Battery Energy Storage Systems (BESS) in the National Capital Territory (NCT) of Delhi, it added.

The tender was issued by TERI on turnkey basis under UI-ASSIST (US-India Collaborative for Smart Distribution System with Storage) initiative with BSES Rajdhani Power Limited (BRPL).

BHEL’s scope of work in the contract includes design, supply, testing, installation and commissioning along with a comprehensive five-year annual maintenance contract (AMC) of the systems at three different locations, it said.

The project will be executed by BHEL’s Electronics Division, Bengaluru.

BHEL has a focused approach in the emerging field of BESS and has already commissioned a 1 MWh BESS at its corporate R&D centre located in Hyderabad.

The state-of-the-art system is commissioned with three different battery technologies viz. lithium-ion, advance lead-carbon and flow batteries, the statement said.

Germany’s Rheinmetall in talks with with BHEL, UP govt; may invest $1 billion:

German defence contractor Rheinmetall may set shop in Uttar Pradesh and partner with state-run Bharat Heavy Electricals (BHEL) to enter the Indian market.

The Dusseldorf-headquartered company may invest over $1 billion in the Uttar Pradesh Defence Corridor, according to a Financial Express report.

The company has already submitted an expression of interest to BHEL, a Rheinmetall official told the newspaper.

A Rheinmetall official told Financial Express that it was too early to provide details of the collaboration.

“We have not reached the level yet. BHEL, being a government of India Navratna PSU, will have to examine the proposal in consultation with the ministry of heavy industries and commerce ministry and get back to us,” the official said.

“Since UP is aggressively wooing investments in the defence corridor, top officials of Rheinmetall requested an interaction with GoUP (government of UP) to understand the various policies in UP, including Invest UP and the Defence Policy and the incentives and other assistance that the government can provide,” the official added.

The report said the Rheinmetall Electronics Division CEO Susanne Wiegand and Rheinmetall Air Defense CEO Fabian Ochsner have had a discussion with UP’s investment and promotion of MSME minister Siddharth Nath Singh.

BHEL’s facilities in Kanpur and Jhansi are among the units that are a part of the state’s defence corridor, the report added.

1 Like