State-owned Bharat Heavy Electricals Ltd (BHEL) and China’s Tebian Electric Apparatus Stock Company are said to be in talks for establishing an integrated manufacturing facility in India for producing electronic and electrical equipment.

The deal, if materialized, would be the first India-China public sector initiative in power equipment manufacturing sector of the county. The deal would also strengthen the position of state run firm in the high-voltage segment, raising its level to compete with companies such as Siemens AG and ABB.

China based TBEA is known for its expertise in manufacturing high-voltage transformers for stepping up or down the voltage while transmitting power from one place the other across a long distance. TBEA produces electric power transformers of up to 1,000 kilovolt (kV) while BHEL produces transformer up to a capacity of up to 400kV.

Shares of state owned BHEL, India's largest power equipment maker by sales, touched an intraday high of Rs. 2389 and a low of Rs. 2374 at the Bombay Stock Exchange (BSE) to close with some gain on the bourses. Shares of company surged 4.51% in the past quarter against just 3.26 per cent rise Sensex.