RPG Enterprises’ flagship infrastructure company, KEC International, has diversified into engineering and construction for the oil and gas sector with an acquisition and a key appointment of a senior executive, and has ambitions of bagging big-ticket orders in future, its chief executive told ET.
On Saturday, KEC announced the acquisition of Gujarat-based Spur Infrastructure at an enterprise value of Rs 62 crore. The company had recently appointed former Shell executive Gouri Venkataraman as its chief technology officer.
While Spur Infrastructure will help KEC fulfil eligibility criteria for oil and gas pipeline projects, Venkataraman will guide the company to expand its offerings to the sector by tapping into his experience at the Dutch energy major, said Vimal Kejriwal, who is also the managing director at KEC.
“The government is talking about ‘one nation-one grid’ and we expect around Rs 5,000 crore to Rs 6,000 crore of tenders to be floated every year. There are only 3-4 players in the country and we felt there was an opportunity for us,” Kejriwal said. “We will work on projects in India and then we can look at overseas markets like the Middle East.”
Spur Infra, incorporated in 2016 by oil and gas sector professionals, has been working on cross country oil and gas pipelines and city gas distribution networks and has annual revenue of more than Rs 100 crore. The company has an order book of Rs 600 crore, which KEC will acquire. KEC currently has confirmed orders and likely orders where it has emerged lowest bidder worth Rs 27,000 crore.
“We decided to enter this business a year ago and build a team. But considering the sensitive nature of this industry, the eligibility criterions are very stringent. Spur will help us qualify for projects. It’s a profitable company with technical expertise, and experienced manpower,” Kejriwal said.
With the acquisition, KEC will be able to bid for oil and gas pipeline projects of around Rs 350 crore. But the company has bigger ambitions for the business going ahead. It plans to start with pipeline projects and then move to city gas distribution projects and eventually to more complex refinery projects.
“Today, apart from L&T and Engineers India, no one is working on refinery process units. We are not doing it right now, but we aim to upscale our entire engineering capability to be able to take up complex projects and that’s why we recently hired a senior executive from Shell,” Kejriwal said.
KEC, which has thus far focussed on power transmission and distribution, railway projects, civil and urban infrastructure, is working on expanding its engineering capability across the businesses it is present in.