From sugar to power, Bajaj Hindusthan now is now getting ready for its next big jump

On Wednesday, the company’s board of directors approved the expansion of its power generation capacity by 40 MW through five coal-based plants of 80 MW each located near its sugar factories in Uttar Pradesh.

In the process, Bajaj Hindusthan’s overall capacity will increase to 830 MW given that its captive plants for its sugar units (with bagasse as feedstock) have a combined capacity of 430 MW.

The company will invest 1,600 crore for this expansion and expects the plants to be ready in 20 months.

They will be set up at Khambharkhera, Barkhera, Maqsoodpur, Kunderki and Utraula in UP. “Since we have enough land near our sugar plants, the power projects will be a cost-effective expansion for us”, a spokesperson said.

As for the coal linkage for these units, Bajaj Hindusthan has already kicked off the application exercise with the Ministry of Coal.

It is also in talks with overseas coal suppliers for long-term contracts besides scouting for acquisition of a mine.

The company has received technical and commercial offers from eight suppliers. The draft agreement for power generation and marketing will be discussed with the UP Government as well as the Uttar Pradesh Power Corporation in a month.

According to its website, Bajaj Hindusthan sells nearly 90 MW surplus power to the UP grid. It is, therefore, obvious that the new capacities will come as good news to the State in addition to boosting the company’s profitability.

It is still a moot point though if the new coal-based power business will be hived off as a separate entity eventually. 

Bajaj Hindusthan is the country’s largest producer of sugar and ethanol. On Wednesday, the scrip was up 4.5 per cent at Rs.222.80 on the BSE.