BHEL adopts strategy to venture into newer areas

Bharat Heavy Electricals Ltd (BHEL), the country's biggest power equipment company, has adopted a policy of forming joint ventures and concluding technical tie-ups for venturing into newer areas of business.

While parking of surplus funds in productive activities is one driver for the approach, attention on diversification and risk sharing seems to be the theme behind all such collaborations.

The company has a cash surplus of Rs 10,000 crore. It has floated joint ventures (JVs) and technical tie-ups or started preliminary exercises for entry into nuclear equipment, wind energy, specialised grade steel, transmission, transportation and water treatment businesses.

It has also adopted the collaboration route for its traditional power business. It has set up JVs with NTPC and the governments of Karnataka, Tamil Nadu, Madhya Pradesh and Maharashtra. The ones with the state governments are for power generation.

In another six months, the company will see some of its JVs taking concrete shape. "We are starting all these ventures, including a non-banking finance company, because we want to put our extra resources into productive use. If we put these resources in banks, it will give low returns," B P Rao, chairman and managing director, told Business Standard.

ref:
http://www.business-standard.com/india/news/bhel-adopts-strategy-to-venture-into-newer-areas/417525/