Megha Engineering: Started business with just Rs 5 lakh, now 2nd-largest buyer of electoral bonds

Megha Engineering and Infrastructure, a little-known Hyderabad-based firm, hit the headlines this Thursday after it emerged as the second-largest buyer of electoral bonds, according to the data made public by the Election Commission of India. 

The company that started business from a small shed with  just Rs 5 lakh capital has in the recent years won the prestigious Zojila tunnel deal, was reportedly involved in the construction of a nodal station for India’s first bullet train project, manages city gas and owns a media group. 

MEIL bought a total of Rs 966 crore worth of bonds between financial years 2019-20 and 2023-24. The unlisted private firm was founded in 1989 by industrialist Pamireddy Pitchi Reddy as Megha Engineering Enterprises, manufacturing pipes for municipalities. 

Reddy, who belonged to a farmer family in Andhra Pradesh’s Krishna district, started from a small shed at Balanagar in Hyderabad. Along with his nephew P V Krishna Reddy, MEIL branched out to constructing roads and small infrastructure projects.

It went on to execute big infrastructure projects such as dams, natural gas distribution networks, power plants, and roads. It was awarded a Rs 1.51 lakh crore Kaleshwaram Lift Irrigation Project that involved supplying water from the Godavari River to the arid parts of Telangana by the BRS-led government in the state.

Managed key projects

MEIL projects include Asia’s longest bi-directional all-weather Zojila Road Tunnel Project, which connects the Kashmir valley and the Ladakh region, development of two inter-state power transmission projects in Uttar Pradesh, Yadgir multi-village drinking water project in Karnataka as part of the government’s JalJeevanMission, Renigunta Naidupeta Road Project and 960 MW Polavaram Hydropower Project in Andhra Pradesh. MEIL is also executing the 212.5 MLD (million litre/day) Amberpeta sewage treatment plant in Telangana, the Dhenkanal drinking water project in Odisha and the Kundah Pumped Storage Hydel Power Project in Tamil Nadu, among others. MEIL is also executing the 212.5 MLD (million litre/day) Amberpeta sewage treatment plant in Telangana, the Dhenkanal drinking water project in Odisha and the Kundah Pumped Storage Hydel Power Project in Tamil Nadu, among others.

Controversies

In October 2019, the Income Tax department raided the offices of the company for alleged irregularities. Last year, the government rejected a $1-billion investment proposal of Chinese electric car maker BYD and its partner MEIL to set up an electric vehicle manufacturing plant.

According to a Crisil report, as of September 31, 2023, MEIL had an order book of Rs 1.87 lakh crore. In the first six months of fiscal 2024, MEIL (on a standalone basis) posted revenues of Rs 14,341 crore and profit after tax (PAT) of Rs 1,345 crore compared to Rs 13,057 crore and Rs 1,532 crore, respectively, during the same period last fiscal.