MUMBAI (Reuters) - Top engineering conglomerate Larsen & Toubro and state-owned Nuclear Power Corp on Monday announced a 17.25-billion rupee ($370 million) joint venture to make forgings.
Nuclear Power Corp would hold 26 percent in the venture and the remainder by Larsen & Toubro, its Chairman and Managing Director A.M. Naik told reporters.
The venture would be funded through a mix of equity and debt with 5 billion rupees being the equity component, Naik said.
At 11.46 a.m. (0616 GMT) L&T shares were up 1.8 percent at 1,615.45 rupees, while the main index was up 1.7 percent.
The new integrated facility would be set up in Surat, in Gujarat, the two firms said in a joint statement.
The unit would be commissoned in April 2011, Naik said.
Indigenous manufacture of forgings will close a critical gap in India’s ability to produce equipment for nuclear, thermal power and hydrocarbon plants and also enable significant reduction in cycle times, the statement said.
Nuclear Power Corp, which operates 17 nuclear reactors in India, has a total power generating capacity of 4120 mega watts.
According to industry estimates, Asia’s third-largest economy could order nuclear reactors worth 600-800 billion rupees ($12.9 billion-$17.2 billion) by 2020 to generate more electricity and reduce chronic power shortages.
Reporting by Pratish Narayanan; Editing by Malini Menon