The Hindu Business Line : Revathi Equipment signs PPA with Rajasthan SEB

Corporate - Alliances & Joint Ventures
Industry & Economy - Non-conventional Energy

Revathi Equipment signs PPA with Rajasthan SEB — To set up windmill project

G. Gurumurthy

Coimbatore , April 25

THE Coimbatore-based Revathi Equipment Ltd has invested in a windmill project in Rajasthan and entered into a long-term power purchase agreement (PPA) with the Rajasthan State Electricity Board for the sale of wind energy.

The wind energy project is essentially meant to be an investment vehicle intended to achieve better returns on the capital invested. The Rs 12-crore windmill project (four wind producing units) undertaken during the last quarter of fiscal year 2003-04 would also serve as a tax shield.

The company, besides the depreciation benefit associated with wind energy investments, could also claim the 10-year tax holiday for income-tax under Section 80IA allowed for new industrial investment, company sources said.

The company has chosen Rajasthan, a power-starved State, for its windmill project as it offered attractive terms both in the power purchase rate as well as the power purchase agreement (PPA) tenure.

Unlike the State electricity boards in the South whose PPA tenure is said to be below the 10-year period, the company could have a 20-year PPA with Rajasthan.

In its financial working for the just ended 2003-04 fiscal, the company's net sales had fallen by 10 per cent to Rs 45 crore from the previous year's operative income of Rs 50.8 crore due to a relative flat market for mining equipment, though it could manage to maintain its profitability with profit before tax at Rs 16.4 crore, almost at the previous year's PBT of Rs 16.2 crore.

Its net profit for the just ended fiscal had gone up to Rs 11.5 crore, against Rs 4.4 crore in the previous year when the company had to charge Rs 10 crore `non-solicitation' fee or the non-competition fee paid to its erstwhile promoters, Atlas Copco India Ltd, leading to shrinkage of profitability that year.

Revathi Equipment's board, which took the financial results on record in its meeting last week, had also announced 25 per cent dividend for 2003-04.

Last year, the company it had skipped dividend payment for the first time after so many years.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Maxfair Drugs to set up R&D centre at Nasik

Nicholas Piramal to invest Rs 200 cr in R&D, expansion

Revathi Equipment signs PPA with Rajasthan SEB — To set up windmill project

`We want to be biggest in fragrances too'

SAIL may have to relocate stockyards at Bhubaneswar

IMFA Group's ferro chrome production higher

Zacks India chief set to head ICRA's BPO unit

New ED for BHEL (Hyderabad)

New Group GM for HMT unit