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November 30, 2009

Deal Alert: Motilal Oswal PE to invest Rs.40-Cr in Power Mech Projects

Edited extracts from the Press Release:

Motilal Oswal Private Equity (MOPE), via its India Business Excellence Fund, is to invest Rs. 40 crores in Power Mech Projects. Religare Capital Markets acted as the exclusive financial advisors to Power Mech for the deal.

Started in 1999, Power Mech is a leading player in the erection, testing and commissioning of Boilers, Turbines and Generators (“BTG”) for thermal and gas based power plants and has been making strong foothold in the overhauling and maintenance of these power plants. Its revenues and profits have grown by 80% and 133% CAGR respectively over the last four years marked by strong unexecuted order book of Rs.15000 mn.

According to S.Kishore Babu, Chairman & Managing Director of Power Mech, the company would be investing around Rs 40 Crores over the next 1-2 years towards building own equipment bank for increased mechanization in the process of erection & commissioning and flexibility in the system to fast track the mobilization of new sites. The new investment will consolidate Power Mech’s leadership position in the BTG segment and act as a stepping stone
to further propel the growth in the untapped BOP & EPC segment.

"Companies like Power Mech which have established a strong goodwill over the last 10 years, will hugely benefit from the growth in the power sector. The company had been able to showcase tremendous growth in the past and has built a very strong order book enabling strong visibility for the next 2 – 3 years," said Raamdeo Agrawal, Chairman of MOPE. "The entrepreneurial ability and vision of the promoter to successfully execute large size projects in a difficult terrain and environment provides testimony of the potential of the company."

About Motilal Oswal Private Equity

Motilal Oswal Private Equity Advisors Pvt. Ltd. is a wholly owned subsidiary of Motilal Oswal Financial Services Ltd. (MOFSL), a global, diversified financial services group with businesses in securities, commodities, investment banking and venture capital.

MOFSL has launched the India Business Excellence Fund (IBEF), a US$ 125 million India focused Private Equity Fund being managed by MOPE. IBEF has an investment focus of providing growth capital to Small & Medium Enterprises (SME), typically in the range of US$ 5-15 million, across sectors. The Fund has already made 8 investments in companies across sectors such as bulk packaging, Power transformers, ITES, financial services, EMS, FMCG etc.