BGR Energy Systems Plans IPO

BGR Energy Systems, formerly GEA Energy System (India) Pvt Ltd, plans to come out with an initial public offer to fund its expansion programme in India and abroad.

Addressing a press conference here on Monday, Mr B.G. Raghupathy, Chairman and Managing Director, BGR Energy, said the company hopes to raise over Rs 600-700 crore for the issue to be priced entirely through the book-building route. It has filed the draft red herring prospectus.

The public issue of 134 lakh shares representing 18.7 per cent of the equity includes a new issue of 72 lakh shares (10%) and offloading of 62.56 lakh shares (8.77%) held by the promoters.

Production plan

The company with interests in design, engineering, manufacture and supply of machines for power, oil and gas, water treatment, refinery and petrochemical process industries plans to set up manufacturing plants in the Mundra multiproduct SEZ, in Bahrain International Investment Park, Bahrain, and in Langfang, China.

Mr Raghupathy said the company caters to clients in the Middle East and China, and facilities at these locations would help BGR serve them faster and better.

According to the prospectus, the company has two manufacturing facilities at Panjetty, Chennai, and Pannamgadu, Nellore. It hopes to increase the manufacturing base and capacity by establishing facilities for making a range of products including de-aerators, desalination plants, water treatment plants, and effluent treatment plants.

Name change
On the name change, Mr Raghupathy said that the company was originally incorporated in 1985, as a joint venture with GEA Energietechnik GmbH, Germany. In 1993 he had acquired the shareholding held by the German company and had decided to change the name in June 2007.

Mr Raghupathy said that BGR Energy has also revived the Cuddalore Power Company’s project envisaging a 1,320 MW thermal project at Cuddalore. The project was awaiting clearance from the Tamil Nadu Electricity Regulatory Commission for the power purchase agreement with the Tamil Nadu Electricity Board.

As the Rs 6,000 crore project takes off, other companies in the BGR group would enhance their stake in the project and BGR energy, which holds a 41 per cent stake, would bring its holding down. BGR Energy will focus on equipment manufacturing, he said, reports The Hindu Business Line.

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