ISGEC Heavy Engineering
, in a BSE press release, announced it has emerged as the lowest bidder (L1) in a reverse auction for a flue gas desulphurization (FGD) systems order for 3 units x 800 MW from NTPC - Kudgi Super Thermal Power Project. The value of the order is about Rs700cr.
The Central Pollution Control Board (CPCB) introduced new emission norms in December 2015 (revised in 2017), which had directed power developers to mandatorily install FGD and other emission control equipment by 2022.
FGD is one of the most expensive retrofits of all pollution control systems in a power plant. For example, a 660MW unit requires Rs250-300cr to install systems and the FGD average cost comes at Rs35- 45 lakhs/MW.
NTPC, which has the largest installed thermal power capacity in India, will require FGD systems for ~25,000 MW, of which, ~7,000MW has already been awarded.
Similarly, demand is also emanating for selective catalytic reduction (SCR), the most powerful post-combustion NOx reduction process for coal-fired power plants. Electrostatic precipitators (ESP), which are extensively used in thermal power plants for removal of fly ash from the electric utility boiler emissions, will also have to be installed in existing power plants.
This opportunity provides scope for: (i) pollution control technology manufacturers, (ii) manufacturers of boilers over 200MW, (3) service providers for engineering, supply, and erection of commission systems, and (4) large-scale engineering, procurement, and construction (EPC) companies.
We expect Thermax
, and ISGEC Heavy to be the main beneficiaries of these orders.
ISGEC manufactures heavy engineering equipment like heavy hydraulic presses, boilers, liquefied gas containers, and air pollution control equipment used in power, cement, automobile, sugar, chemical, oil & gas, fertilizer, and defense sectors. ISGEC also provides EPC solutions to small power plants.
ISGEC Heavy Engineering share price is currently at Rs5,320, up Rs159.15, or 3.08%, from its previous close of Rs5,160.85 on the BSE.