NTPC, Bharat Forge mull JV for plant parts

Dec 28 | Updated: Dec 29 2007, 05:04am hrs
NTPC LtdIndia s biggest power produceris negotiating with Bharat Forge Ltd to set up a joint venture to produce machined components for power plants, NTPC chairman T Sankaralingam said.

There is a shortage of good quality forgings and pipes for the power industry in India and we want to meet the growing demand, Sankaralingam said in a telephone interview from New Delhi. We are in talks with Bharat Forge. The decision depends on our board of directors.

Demand for power-plant equipment has surged with Prime Minister Manmohan Singhs government spending about $149 billion in the next five years on boosting generation capacity and upgrading the nation s transmission network.

Backward integration through the forgings venture can help NTPC increase its revenue by up to Rs 5 billion ($126 million) according to our estimate, said KD Mehru, vice president at Mumbai-based stock brokerage Darashaw & Co Pvt.

NTPC shares rose Rs 1.45, or 0.6%, to Rs 241.4 at the 3:30 pm close on the Bombay Stock Exchange. Bharat Forge shares gained Rs 12.55 or 3.7%, to 354.15. Sankaralingam said state-run NTPC has informed India s power ministry of its plans to enter the business.

Bloomberg