November 12, 2007 -- 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.
“As against launches of one satellite in a year or two some time back, the Indian Space Research Organization (Isro) has now reached a capability of launching four-five satellites a year. To meet this, we have to supply 12-15 liquid and cryogenic engines a year to Isro for which we need to augment our capacity,” Reddy said.
Currently, there are only around 15 machine tool manufacturers in the country that meet the requirement of the Indian aerospace industry. The list includes companies such as Larsen & Toubro Ltd, Godrej & Boyce Mfg. Co. Ltd, Kerala Hitech Industries Ltd or Keltec, and MTAR.
India has announced plans to launch 25 spacecraft in the coming five years at an investment of around $2 billion.
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.
a leading machine tool manufacturer that provides equipment to Indian nuclear, space and defense programs, is planning to setup a seperate arm to manufacture oil field equipment.
This is to meet the growing requirements of oil and gas industry, both in the domestic and global markets,
Funds for the expansion will come from the $65 million (Rs 257 crore) invested by the world’s largest PE entity Blackstone Group recently for a 26 % stake in the Hyderabad-based company. This gives MTAR a valuation of Rs 1,000 crore.
The foray into manufacturing oil field equipment comes, even as it gears up to make, more liquid and cryogenic engines to meet the booming satellite launches in the country.
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.
Source: Mint
