IT was a historic moment for India when the 45-member Nuclear Suppliers Group (NSG) decided to resume civilian nuclear commerce with India.
India gained unique status as the only nuclear weapons power to be allowed global nuclear commerce without signing either the Nuclear Non-proliferation Treaty or Comprehensive Test Ban Treaty, until now a precondition for entering the elite nuclear club.
The deal will not just give India access to nuclear fissile material and technology to mount a credible nuclear energy programme, it will also open up certain key high-tech industries such as pharma, IT, space and defence.
Stock investors should watch out for stock picks in this upcoming sector for some great opportunities for investing.
Any prudent stock market investor should be asking himself which Indian companies are likely to benefit from nuclear deal?
As many as 400 Indian and foreign firms are seen as the beneficiaries of the far-reaching NSG verdict. India will can now attract over $40 billion in foreign investment over the next 10-15 years as the result of private sector entry into India's nuclear power generation.
“We have at least a dozen technologically-competent players who can rope in strategic alliances and joint ventures with reactor manufacturers. Eventually, these players can go on to become reactor manufacturers,” said V K Chaturvedi, the chairman and managing director of Nuclear Power Corporation of India (NPCIL).
Already players such as L&T, India’s biggest engineering company and BHEL, the largest power equipment maker, are associated with NPCIL for the erection, procurement and construction of nuclear plants. NTPC is going to be another major player in this arena.
Experts said with the NSG deal, India needs to look at allowing private sector participation for realising its plans of adding 60,000 MW of nuclear power. This will require an investment of over Rs 600,000 crore, since each MW of nuclear power costs about Rs 10 crore.
Already R-Power, NPCIL, JSW, BHEL and L&T have lined up plans worth over Rs 1,00,000 crore for foraying into this sector. Larsen & Toubro is planning to form a Rs 2,000-crore ($463 million) forging venture with NPCIL.
NPCIL officials revealed they have already done exploratory meetings and technical discussions with three major reactor suppliers – Areva of France, General Electric and Westinghouse Electric Corporation of the US for supply of reactors for these projects. Look out for the Indian companies which have a tie up with these major players.
"We expect another 200 medium and small firms to get into the act as ancillary producers to the big companies, thereby giving a new direction to efficient and cheaper power production in the country," said Amit Mitra, the secretary general of the Federation of Indian Chambers of Commerce and Industry (Ficci).
Indian companies likely to benefit from nuclear deal
Reliance Energy reportedly plans to invest additional Rs.12, 000 crore in nuclear power capacity. It plans to install 2000 megawatt of nuclear power capacity.
Tata Power Company tied up with some major nuclear equipment suppliers like Areva. It already has a relationship with Toshiba.
Areva T&D is reportedly looking at a plant for uranium mining and recycling. The plant would be set up after nod from Nuclear Power Corporation.
Alstom Projects India, an established player in nuclear business is currently manufacturing nuclear reactors, rotors and turbines for nuclear power stations. The company is expected to receive business from its parent company, which is a world leader in conventional nuclear projects.
Larsen & Tourbo is working on a 2000 mega watt Kun |
