Cashing in on the offset policy announced by the ministry of defence to bridge the shortage of equipment to the armed forces, top equipment suppliers like state-owned BHEL have jumped into the fray.
BHEL has worked out strategies to make supplies to the defence sector through suitable technology tie ups with the leading foreign majors.
“We see big business emerging in defence after the announcement of the offset policy,” B P Rao, chairman and MD, BHEL, told HT in an exclusive chat after announcing the company’s financial performance on Tuesday. “The offset policy that includes transfer of technology is an excellent move that will provide huge opportunities for us.”
Rao said that BHEL has identified defence, transportation and renewables as three main growth areas in its business portfolio. “Transportation is going to be our other major focus area and we have for the first time participated in R4,000crore-order by the Delhi Metro Railway Corporation (DMRC) to supply 400 coaches.”
BHEL announced a net profit at R6,868 crore from R6,011 crore a year earlier, a 14.3% rise. The firm’s turnover jumped 13.8% to R49,301 crore for 2011-12 as against R43,337 crore a year ago.
Alongside, Rao said BHEL was also looking at reviving its renewables business and is essentially looking at windmills. “We are refocusing on windmills and are also in talks with a number of companies for an appropriate tie up,” he said.
Rao also confirmed that BHEL’s board of directors decided to withdraw the initial papers for its follow-on offer that were filed with Securities and Exchange Board of India (SEBI).
He said the decision has been taken after the receipt of “no-objection” for withdrawal of DRHP (draft red herring prospectus) for BHEL FPO from the department of heavy industry and Department of Disinvestment.
The company filed DRHP in September for the FPO under which the government’s 5% stake in BHEL was expected to fetch over R4,000 crore.