BackMTAR to set up arm to make oilfield equipment
MTAR to set up arm to make oilfield equipment
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Hyderabad: MTAR Technologies Pvt Ltd, which recently received an investment of $65 million (Rs255 crore) from private equity firm Blackstone Group Lp., plans to set up a separate division to manufacture oilfield equipment in an effort to meet growing demand from domestic and foreign oil and gas companies.
MTAR supplies components to India’s nuclear, space and defence industries.
“We have recently obtained orders to make prototypes of oilfield equipment worth $2 million from a US-based company, which is keen on placing orders with us for hundreds of millions worth of equipment a year," said MTAR chairman P. Ravindra Reddy. He declined to reveal the name of the firm.
MTAR’s entry into oilfield equipment comes even as it gears up to make more machine tools and liquid and cryogenic engines to meet the growing demands of India’s aerospace industry. Both efforts will be funded by Blackstone’s investment in the company. Its $65 million investment for a 26% stake gives the privately held MTAR a valuation of around Rs1,000 crore.
MTAR plans to complete this expansion drive in the next 12-18 months, according to Reddy.
The company, which currently employs around 300 engineers, plans to add 200 by the time this expansion is complete.
MTAR is upbeat over the growing opportunities for supply of equipment and machinery to the Indian aviation industry. "While the Government has announced the 30% offset policy for the Indian aerospace industry, the domestic industry is unable to meet not more than 5% of the requirement." Reddy told Mint.
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