NTPC signs pact with Bharat Forge

New Delhi: Marking further progress on its equipment manufacturing foray, NTPC Ltd on Thursday entered into a pact with Bharat Forge Ltd to set up a joint venture unit for manufacturing castings and forgings for power plants at an investment of Rs 3,000 crore.

NTPC’s Chairman and Managing Director, Mr T. Sankaralingam, told reporters here that the proposed venture would commence operations within around 15 months of its inception. NTPC is likely to hold a 49 per cent stake in the new firm.

The memorandum of understanding was signed between Mr Baba Kalyani, Chairman and Managing Director of Bharat Forge, and Mr Sankaralingam. The NTPC chief clarified that the pact would not impact the company’s existing agreement with equipment major Bharat Heavy Electricals Ltd (BHEL); it was signed exclusively for participation in the engineering, procurement and construction (EPC) space.

“There is no exclusive deal (with BHEL). We are two independent companies and are at liberty to produce any equipment,” he said. Mr Sankaralingam said once formed, the joint venture with Bharat Forge would also bid for upcoming tenders.

Strategies planned


NTPC officials had earlier cited a shortage of good quality forgings and pipes for the power industry in the country, a situation which the proposed venture hopes to exploit. Backward integration through the forgings venture is also expected to help NTPC increase its revenues, according to analysts.

The move by NTPC comes on the heels of the power major picking up a stake in Transformers and Electricals Kerala Ltd (TELK) in June last year. NTPC bought 44.60 per cent stake in the Kerala PSU with the aim of getting into manufacture and maintenance of transformers