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ShareTo provide solutions for distribution-linked services
MUMBAI: Hyderabad-based ICSA Ltd, which provides software development services and technology solutions for the power sector, is looking at a revenue-sharing model with state utilities to provide total turnkey solutions for all distribution-related services.
G Bala Reddy, chairman and managing director, ICSA Ltd, said the company is looking to bid for the franchisee model initiated by Maharashtra government.
"This model is being pursued by other states too," he said. He added that ICSA is negotiating a similar arrangement with utilities in Sri Lanka and the Middle East to enter the distribution sector there.
Since 2006, state utility Maharashtra State Electricity Distribution Company Ltd (MSEDCL) has awarded two tenders under the franchisee model for Bhiwandi and Nagpur circles. Torrent Power won the bid for Bhiwandi and Crompton Greaves for Nagpur. The move was aimed at substantially reducing distribution losses in these circles.
"As our expertise lies in reducing distribution losses, and we have several distribution-related products with embedded technology, we are well positioned to offer total turnkey solutions for this sector," Reddy said.
This is a totally new area of operation for the company, which hopes to freeze the plans by the end of the current fiscal. Once a framework is ready, ICSA will take it forward to other countries in Southeast Asia.
In the domestic market, ICSA offers services and products such as agricultural load management, distribution transformer monitoring systems, theft detection devices, and intelligent automatic meter readings, among others. It also provides customised products for power utilities in the field of energy management, energy audit and control applications and data acquisition systems using GSM technology.
Earlier this month, ICSA signed a deal with ECE Industries to buy the latter's machineries and equipment along with available drawings, designs and data for energy meters. "This acquisition, though low on value, brings in a lot of synergy for us as now we have the capability to supply meters too," he said.
The value of the acquisition was Rs 4 crore and the company plans to invest another Rs 5 crore in the acquired business of ECE.
The transaction will help ICSA manufacture energy meters in its own capacity. It also allows ICSA to use the brand name of ECE for a period of six months. Both the parties have signed a five-year non-compete agreement.
Through the acquisition, the company expects to clock revenues of Rs 30 crore in the first year. It plans to introduce smart meters in the Indian market by the fourth quarter of the current fiscal. "We were so far providing automatic meter-reading services to utilities and our other clients. And after the acquisition, we will embed the technology in our energy meters and make them intelligent," Reddy said.
