The Yash Birla group-owned power solutions company, Birla Power Solutions (BPSL), is planning to enter into the diesel engine segment, through an acquisition in the range of Rs 500 crore.

The company is presently reported to be in talks with 4-5 domestic and overseas companies, mostly in the unlisted space, and hopes to enter the business in upcoming next 9 to 15 months.

A senior company official said, “We have plans to enter diesel generator, petrol, LPG and kerosene segment, but it will be too early to comment on any specific deal.”

He further added that, “The size of the acquisition will depend on the horse power of the engines manufactured by the company. In addition, the company is looking at a company manufacturing diesel engines of capacities ranging between 25 horse power and 200 horse power.”

The investment is expected to be funded through a mix of debt and equity, with equity accounting for 15-20 per cent.

Apart from latest development, the company plans to open about 250 outlets of Birla Power Shoppe across 40 cities by March 2010 from 60 outlets at present. The company hopes to increase its production capacity to achieve a turnover of over Rs 500 crore by 2011-12, excluding the turnover of the company that could be acquired.

The company has posted a turnover of Rs 223 crore for the financial year 2008-09.