State-run Chinese companies such as CDC and China Harbour Engineering attracted by India’s infrastructure development programme are looking to buy stakes in Indian companies in the engineering, procurement, construction (EPC) and power generation space, respectively to drive their business, said two people aware of the Chinese firms’ interest.

CDC is one of China’s largest power generation utility, has been attracted by India’s stressed power projects, another government-owned firm—China Southern Power Grid is in discussions with Essel Infraprojects Ltd for jointly bidding for power transmission projects.

This comes in the backdrop of India’s plan to invest as much as Rs3.96 trillion in the current financial year to bankroll its new integrated infrastructure plans comprising roads, railways, waterways and civil aviation.

Subhash Chandra’s Essel Group has been trying to ramp up its energy sector plans, including exploring a solar module manufacturing facility with one of China’s largest solar equipment makers GCL-Poly Energy Holdings Ltd, Mint reported on 22 March. Essel Infraprojects Ltd, an Essel Group firm, has a presence across sectors such as green energy, transportation, electricity transmission and distribution, and urban infrastructure.

According to experts, there may be some traction on the EPC part of the Indian infrastructure play by the Chinese firms but remain cautious about those projects which may involve asset ownership.

Jagannarayan Padmanabhan, director, transport and logistics at Crisil Infrastructure Advisory said that on the EPC part, it is an equal opportunity for everyone to come in. On others, there is a question on how much of fruition will happen because of issues over ownership of the asset. It depends on their interest and the risks associated.

However, the domestic industry has been raising concerns about Chinese firms’ participation in India’s infrastructure projects given their strategic importance. There have been instances in the past when India stopped giving clearances to telecom equipment imported from China over security concerns.

China Harbour Engineering is looking for acquisition in the EPC space across sectors. CDC has also become interested in acquiring stressed power projects, said the person aware of the company’s India strategy, requesting anonymity.

CDC’s interest comes at a time when the government is trying to address the problem of stressed assets in the power sector. JM Financial Research, in an 8 March note, wrote that its 2016 study of stressed power assets had concluded that of the total 28 gigawatts (GW) generating capacity in question, assets accounting for 14GW were at high risk.

China Harbour Engineering is a unit of China Communications Construction Co. Ltd. Chinese firms’ interest stems from ambitious plans such as Sagarmala and Bharatmala. While the total road length to be developed as expressways under Bharatmala will be around 51,000km, the Sagarmala programme envisages construction of new ports to harness the country’s 7,517km coastline and setting up as many as 142 cargo terminals at major ports.

There has been growing interest among overseas investors in the Indian infrastructure space, particularly in sectors such as energy.

here is company details.

 

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