Meet Megha Engineering, second-largest contributor to electoral bonds

Led by PV Krishna Reddy, who is listed as the 54th richest person in India by Forbes, Hyderabad-based Megha Engineering & Infrastructure Ltd (MEIL) and its associated companies donated around Rs 1,200 crore via controversial electoral bonds to various political parties.

Hyderabad: From a small fabrication unit in 1989, Hyderabad-based Megha Engineering & Infrastructure Ltd (MEIL) — the second-largest contributor to the now-scrapped electoral bond scheme — has emerged as one of the top engineering firms specialised in engineering, procurement and construction (EPC) contracts in the country.

Led by PV Krishna Reddy, who is listed as the 54th richest person in India by Forbes, the MEIL and its associated companies donated around Rs 1,200 crore via controversial electoral bonds to various political parties, as per the information released by the SBI.

While the company purchased electoral bonds worth Rs 966 crore between 2019 and 2023, other companies associated with it, too, made donations to the political funding scheme. These include the Western UP Power Transmission Company Limited (Rs 220 crore), the SEPC Power donated (Rs 40 crore) and the Evey Trans Private Limited (Rs 6 crore).

Over the years, the MEIL has diversified across verticals and undertaken turnkey projects related to irrigation, urban water supply, hydrocarbon, transport, power, and roads. It also manufactures mild steel and spiral pipes as well as customised fabrication as a backward integration initiative.

It is also the contractor of the controversial Rs1-lakh crore Kaleshwaram project in Telangana. 

In the last five years, while diversifying into other sectors, the MEIL has also gone beyond Telugu states bagging EPC projects in Uttar Pradesh, Maharashtra and the Northeast. Interestingly, the company is known for bagging government projects by quoting extremely lower rates than their competitors.

While the MEIL was started by P Pitchi Reddy having roots in Andhra Pradesh's Krishna district, the company achieved heights after his nephew PV Krishna Reddy took over the operations in mid 90s.

Krishna Reddy's rise coincided with Y S Rajasekhar Reddy becoming the chief minister of Andhra Pradesh in 2004. Between 2004 and 2009, the MEIL bagged many irrigation projects in Andhra Pradesh as the then Congress government's prime focus was on 'Jalayagnam', a priority sector to provide irrigation facilities to farmers in the combined Andhra Pradesh.

The MEIL now has presence in more than 17 states in India and in 20 other countries. The company derives 80-85% of revenue from the EPC segment. According to the ratings agency CRISIL, in the first six months of 2023 fiscal, the MEIL (on a standalone basis) posted a revenue of Rs 13, 057 crore.

CRISIL also said that revenue visibility of the group is strongly backed by a healthy outstanding order book of Rs 1.48 lakh crore as on October 31, 2022, with 52% of the orders pertaining to irrigation and drinking water segments. 

At the end of October 2022, 39% of the company's order book comprised irrigation projects compared to 82% in the 2018 fiscal, showing an improvement in diversification. 

The MEIL's net worth was estimated to be Rs 21,500 crore as on March 31, 2023, which is expected to improve to above Rs 25,000 crore in the 2024 fiscal.

 
BRS received Rs 1,215cr via EBs

The Bharat Rashtra Samithi, which ruled Telangana for a decade, received donations to the tune of Rs 1,215 crore through electoral bonds between 2017-18 and 2022-23, standing fourth among the political parties in the country. In comparison, the YSRCP, which has been in power in Andhra Pradesh for the last five years, received Rs 382 crore, standing seven in the country. Chandrababu Naidu's TDP, which was in power in Andhra Pradesh between 2014 and 2019, received Rs 147 crore via electoral bonds.

The common thread among the three Telugu parties is the MEIL which executed the Kaleshwaram project during the BRS regime in Telangana, bagged Polavaram project head works in Andhra Pradesh from the YSRCP government and executed the Pattiseema irrigation project during the TDP rule.

Apart from the MEIL, infra firms, realtors and Pharma companies based in Hyderabad have emerged as some of the most significant purchasers of electoral bonds.

Dr Reddy's Laboratories donated Rs 80 crore; Natco Pharma Rs 70 crore; Navayuga Engineering Rs 66 crore; Hetero Drugs Rs 69 crore; Aurobindo Pharma, the director of which was arrested in the Delhi liquor scam, donated Rs 50 crore; MSN Pharma Group Rs 38 crore; renewable energy firm Greenko group Rs 35 crore; Rajapushpa Developers Rs 35 crore, and another prominent real estate firm My Home Group Rs 20 crore.

Interestingly, an income tax search yielded Rs 500 crore unaccounted cash in October 2021 from Hetero group. Hetero Group's chairman Bandi Parthasarathy Reddy is BRS Rajya Sabha member and is also facing a probe by the Enforcement Directorate.