New Delhi: BGR Energy Systems is the lowest bidder for a contract worth up to $761 million (Rs 3,600 crore) to supply four to five sets of turbines and generators to India’s largest utility NTPC , the power equipment maker said on Friday.
NTPC had floated a tender to supply nine units of supercritical — energy efficient and environment friendly — turbine and generator units with a capacity of 800 mega watts each.
A consortium of Larsen & Toubro and Mitsubishi Heavy and of Bharat Forge and France’s Alstom, also bid for the assets, BGR said in a statement.
Japan’s Toshiba Corp and state-run Bharat Heavy Electricals also bid, it said.
BGR has two joint ventures with Japan’s Hitachi to produce super-critical steam turbines and boilers in the southern state of Tamil Nadu, with a proposed investment of Rs 4,400 crore ($927 million), it added.
The turbines for the NTPC order will be sourced through a mix of imports from Hitachi, components made by the BGR-Hitachi JV and systems made by BGR Energy.
Shares in the firm, valued at $556.5 million, have fallen 50% halved so far in 2011, while the benchmark index lost 18% in the same period.
The stock is likely to remain under pressure as analysts believe a contract with NTPC, if awarded, would rely on import of equipment, create higher expenses and increase debt.
“We believe the company would have to undertake substantial capex to prepare facilities for supplying these turbines, increasing debt requirements for the company,” Goldman Sachs said in a report.
The shares rose 14% in Thursday trade as investors anticipated a contract.
They erased those gains on Friday, closing at Rs 361.20, down 1.7%, in a Mumbai market that was up 0.3%.