In view of BHPV's working capital position, BHEL has decided to issue raw material for the orders free of cost. The first batch of raw material has already reached the BHPV works. As setting up another manufacturing plant needs massive greenfield investments and long gestation time, supporting an existing entity such as BHPV makes better business sense for BHEL where economies of scale can be achieved by enhancing capacity with brownfield investments.
BHEL plans to load BHPV every monthly, based on its performance and capacity. The market for BHPV's products, especially in process equipment and cryogenics, is expected to grow rapidly.
With a capital expenditure of Rs 236 crore, spread over three years, in addition to induction of experienced manpower and required technology from BHEL, BHPV's turnover is expected to cross Rs 1,000 crore in five years.