Baring PE may buy stake in Trichy co
US-based private equity major Baring Private Equity Partners is in talks with the promoters of Cethar Vessels , an unlisted power equipment manufacturer, to buy 7.5% equity stake for about Rs 500 crore.
The Trichy-based , Rs 1,100-crore company, which is promoted by former Bhel and Isro employees , plans to increase its capacity to meet the strong demand for power plants and has been scouting for finance to fund its plans to foray into turbine manufacture.
The talks with Barings pegs Cethar's valuation at about Rs 6,667 crore.
When contacted, Cethar chairman K Subburaj said: "We are in talks with a private equity firm." He, however, refused to divulge the investment details. A Baring spokesperson said: "We don't comment on market speculation."
Cethar which recently tied up with US-based Riley Power, currently has an annual capacity to make up to 8,000 megawatts of boilers and is planning to ramp it up to 12,000 mw. The company had an order book of Rs 5,500 crore this year and hopes to close the year with a revenue of Rs 2,750 crore.
According to people familiar with the development , Baring is being advised by consulting major KPMG and the deal with Cethar is expected to be closed soon.
Reeling under a power deficit of 12-14 % during peak hours, India has targeted to add over 78,000 megawatts of generation capacity by 2012 and 100,000 MW each in the XII and XIII Five Year Plans. This would need increased power generators and equipment.
Global private equity majors have been betting big on power infrastructure and equipment segment, due to the growth trends. The energy sector, which saw a sharp fall in PE investment last year, has recovered this year. According to Venture Intelligence, a Chennaibased research company, till November there were 22 investments worth $2 billion done in the power sector as against 21 investments worth $560 million in the whole of 2009.
Global funds including General Atlantic, Goldman Sachs , Morgan Stanley , Everstone, Norwest, Olympus Capital, 3i, Temasek, IDFC PE, Argonaut and Ascent Capital were the major investors during the year in companies such as Asian Genco, Tata Ultra Mega, GVK Energy and GMR Energy during the year.
"Infrastructure in general and power particularly , has become a stable bets for PE investors as the country has chalked out huge invesment plans in these areas for the next decade," said Arun Natarajan, chief executive officer at Venture Intelligence. "The deal size too is increasing , which is a positive sign for a capital intensive sector like power," he added.
The Trichy-based , Rs 1,100-crore company, which is promoted by former Bhel and Isro employees , plans to increase its capacity to meet the strong demand for power plants and has been scouting for finance to fund its plans to foray into turbine manufacture.
The talks with Barings pegs Cethar's valuation at about Rs 6,667 crore.
When contacted, Cethar chairman K Subburaj said: "We are in talks with a private equity firm." He, however, refused to divulge the investment details. A Baring spokesperson said: "We don't comment on market speculation."
Cethar which recently tied up with US-based Riley Power, currently has an annual capacity to make up to 8,000 megawatts of boilers and is planning to ramp it up to 12,000 mw. The company had an order book of Rs 5,500 crore this year and hopes to close the year with a revenue of Rs 2,750 crore.
According to people familiar with the development , Baring is being advised by consulting major KPMG and the deal with Cethar is expected to be closed soon.
Reeling under a power deficit of 12-14 % during peak hours, India has targeted to add over 78,000 megawatts of generation capacity by 2012 and 100,000 MW each in the XII and XIII Five Year Plans. This would need increased power generators and equipment.
Global private equity majors have been betting big on power infrastructure and equipment segment, due to the growth trends. The energy sector, which saw a sharp fall in PE investment last year, has recovered this year. According to Venture Intelligence, a Chennaibased research company, till November there were 22 investments worth $2 billion done in the power sector as against 21 investments worth $560 million in the whole of 2009.
Global funds including General Atlantic, Goldman Sachs , Morgan Stanley , Everstone, Norwest, Olympus Capital, 3i, Temasek, IDFC PE, Argonaut and Ascent Capital were the major investors during the year in companies such as Asian Genco, Tata Ultra Mega, GVK Energy and GMR Energy during the year.
"Infrastructure in general and power particularly , has become a stable bets for PE investors as the country has chalked out huge invesment plans in these areas for the next decade," said Arun Natarajan, chief executive officer at Venture Intelligence. "The deal size too is increasing , which is a positive sign for a capital intensive sector like power," he added.
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