Electoral Bonds: Megha Engineering Is Second Highest Donor With Rs 1,116 Crore
Megha Engineering and group firm Western UP Power Transmission purchased 1,116 electoral bonds worth Rs 1 crore each between April 2019 and January 2024.
The company involved in the construction of an all-weather tunnel in the Himalayas as well as a nodal station of India’s first bullet train project has emerged as among the top donors in the electoral bonds list that was made public on Thursday.
Megha Engineering & Infrastructures Ltd. and group firm Western UP Power Transmission Co. Ltd. purchased a total of 1,116 electoral bonds worth Rs 1 crore each between April 2019 and January 2024, according to the electoral bonds list published by State Bank of India on the website of the Election Commission of India.
That totals to Rs 1,116 crore—the second highest contribution after Future Gaming & Hotel Services Pvt. Ltd. with Rs 1,368 crore.
The infrastructure-focused company took a controlling 50.1% stake in listed firm Olectra Greentech Ltd. in August 2018, according to a Nikkei report published on Nov. 10, 2018. Olectra had previously forged a deal with Chinese EV maker Byd Co. Ltd. to make electric buses in India.
Since then, Olectra has become a Rs 1,000-crore enterprise, almost doubling its revenue year-on-year between FY22 and FY23. Over the last year alone, the stock has surged more than 150% to give the electric bus maker a market capitalisation of Rs 14,700 crore.
Megha Engineering itself is among the most valued unlisted companies in India with a valuation of Rs 67,500 crore, according to a Axis Bank-Hurun India report published in February 2024. Its founder, P Pitchi Reddy, is among India’s wealthiest with a net worth of Rs 37,300 crore, according to ‘360 One Wealth Hurun India Rich List 2023’. In fact, his net worth has grown by Rs 24,700 crore in the last one year alone.
PV Krishna Reddy, his nephew and the managing director of Megha Engineering, has a net worth of Rs 35,800 crore—up Rs 23,700 over the previous year.
The Works
Hyderabad-based Megha Engineering is essentially an engineering, procurement and construction company. Its bragging rights include the Zoji La tunnel connecting Srinagar to Ladakh all year around, as well as the Thane-Borivali tunnel project in Mumbai that it won by outbidding Larsen & Toubro Ltd.—India’s largest engineering company.
Additionally, Megha Engineering’s joint venture with Hindustan Construction Co. Ltd. is building the Bandra-Kurla Complex station of the Mumbai-Ahmedabad bullet train project. It is also constructing Telangana’s largest lift irrigation project—quite a journey for a firm that started off building tiny pipes for municipalities in 1989.
The company also controls Associated Broadcasting Co. Pvt. Ltd., which owns regional news channels under the TV9 brand.
The core of the company includes four companies:
MEIL Green Power Ltd., which was constituted to execute the 50 MW solar project in Anantapur, Andhra Pradesh.
Western UP Power Transmission Co. Ltd., which is building two key transmission lines in Uttar Pradesh. Interestingly, it also features in the electoral bonds donor list with Rs 220 crore in donations.
Megha Fibre Glass Industries Ltd., which houses the pipe-making business.
Joint Consortium of Engineers: Megha Engineering acquired the firm to strengthen its presence in the hydrocarbon space. The company has recently diversified its activities into many key infrastructure verticals.
The Financials
According to Crisil Ltd., Megha Engineering had an order book of Rs 1.87 lakh crore as on Sept. 31, 2023, or 5.4 times its revenue as on March 31, 2022.
In the first six months of Fiscal 2024, the company has clocked revenue of Rs 14,341 crore —up 10% compared to the year-ago period—on a standalone basis. Consolidated revenue is also likely to see healthy growth in the medium term, thanks to execution of international order book, stable revenue contribution from Western UP Power Transmission and making of 9,218 buses by Olectra Greentech over the next three years, Crisil said in a Jan. 10 note.
Operational profitability, the ratings agency said, is seen at 15.5-16% in the medium term, as against 16.5-17% seen historically as the company is executing competitively bid, large projects.
The liquidity profile is supported by annual cash accruals of about Rs 3,500 crore in the medium term, which would be sufficient to take care of long-term annual debt obligations of Rs 600-800 crore, Crisil said.
