Videocon, L&T in power pact
Consumer durables maker Videocon Industries and engineering major Larsen & Toubro (L&T) are learnt to be in talks to float a new power company in Gujarat.
According to sources close to the development, Videocon and L&T will initially invest Rs 4,500 crore to set up a 1,000 mega-watt coal-based power plant near Pipavav port in Gujarat. Videocon and L&T would hold equal stakes in the venture, they said.
Sources said the companies had chosen Pipavav port for ease in importing coal. Pipavav has of late become a hot destination for coal-fired power plants.
While Tata Power, in a joint venture with China Light and Power is setting up a 2,000 MW coal-based power plant, Gujarat State Petroleum Corporation and Reliance Energy also have plans in Pipavav.
When contacted, Videocon Managing Director Venugopal Dhoot said, "We are not in talks with L&T for energy projects." The L&T spokesperson said: "We are exploring various options in the power sector. But the specific venture that you mentioned is market speculation."
However, Videocon had on July 12 informed the Bombay Stock Exchange (BSE) of its plans to enter the power generation and distribution business.
Analysts said the scheme would fetch good results for both companies. While Videocon would benefit from diversifying into power, for L&T power generation would extend its value chain.