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IIEL forays into energy rental

India Infrastructure Equipment plans to invest up to Rs 600 crore over the next five years in the new business.

india Updated: May 18, 2006 16:33 IST

India Infrastructure Equipment Ltd, country's largest equipment rental company, said on Thursday that it has forayed in energy rental segment and plans to invest up to Rs 600 crore over the next five years in the new business.

IIEL, which gives infrastructure equipment to other firms on rent, has set up a separate division Quipo Energy Rental for providing gas-based power generating equipment to various industries in textiles, oil and gas and telecom sectors.

"We would invest Rs 25 crore in the venture in first year and may invest up to Rs 600 crore over the next five years," Quipo Energy Chief Executive Hemant Pincha said.

Asked how the company plans to raise the amount, he said for the first year it would be a mixture of debt and equity but added they have not yet decided on the balance investment.

Lincha said after establishing the new business, the division may later be hived off into a separate company. In such a case, the new company would also tap the capital market with an initial public offer to raise the necessary amount.

Pincha said the investment would be primarily in buying equipments and setting up equipment banks or hubs in India and abroad. The division is targeting a revenue of about Rs 250 crore in five years, he said.

"The first hub would be set up in Ahmedabad to tap the industries in Gujarat. Later, three more hubs in India besides one each in Singapore and Dubai would be opened up," he said.

The division plans to have equipment totalling a capacity of 200 MW electricity, in modules of one megawatt and above. IIEL has also tied up with Singapore-based Deutz Asia Pacific for sourcing equipments totaling 75 MW worth $20 million in the next three years, he said.