Western, northern region cos dominate infrastructure space
November 23, 2007
NTPC, Larsen & Toubro and Bharti Airtel top the list (in terms of income) of Dun & Bradstreet India’s list of India’s Leading Infrastructure Companies 2007. This listing, part of D&B’s study on infrastructure in India, profiles 187 companies – 121 from the construction sector, 52 from power and 14 from telecom services. The study provides an industry overview of infrastructure in India and key characteristics of the sampled companies .
D&B’s analysis reveals that companies based in the western (37 per cent) and northern regions (30 per cent) dominate the infrastructure industry. While the initial public offer route is a key means of financing for the construction companies, the infrastructure industry as a whole is funded largely through term loans and self-financing.
Construction goes public The study has disclosed that the construction sector is dominated by public companies (listed and unlisted); these accounted for 92 per cent of the 121 construction companies that qualified under D&B’s selection criteria. Thirty per cent of listed construction companies had absorbed close to Rs 20,000 crore through IPOs in 2006-07. The sample companies plan to raise Rs 2,000 crore more in the near future. Most of the companies that raised money through the IPO were focussed on roads, power, irrigation and residential township projects.
The report also brings out the increasing synergy between private players and the Government. Around 50 per cent of the sample companies have collaborations such as public private partnership, special purpose vehicles, other domestic partnership and BOT and BOOT contracts.
Power’s conventional The study found that India continues to rely on conventional sources such as coal, gas and lignite for power generation. Of the 178 power plants operated by the sample companies, 45 per cent were thermal power plants, 38 per cent hydro based and about 10 per cent be run by Nuclear Power Corporation. Only the rest accounted for unconventional energy sources such as wind farms and combined cycle power plants.
The report stated that Central government owned companies have taken the lead in terms of planned capacity additions, accounting for 52 per cent of the total plan. Private sector, including the two ultra mega power projects accounted for 32 per cent of the addition plans, while state-owned companies trailed behind with plans to add only 16 per cent to their capacity.
Source: thehindubusinessline.com
Marginal player
November 19, 2007
Kaushalya Infrastructure has plenty to prove since it is yet to gain a critical mass.
Kaushalya Infrastructure Development (Kidco), a construction and engineering company focussed on eastern India plans to raise Rs 42-51 crore from the public by offering 85 million shares, a 43.4 per cent share of its fully-diluted equity capital.
The price band for the issue is fixed between Rs 50-60 a share. The company aims to garner a market capitalisation of about Rs 98-118 crore upon listing.
From the issue proceeds, Kidco will acquire construction and infrastructure equipment and make investments in its build-operate-transfer (BOT) and build-own-operate-transfer (BOOT) projects. It also plans to acquire land for real estate development.
Kidco operates in three verticals, which include construction and engineering, rural electrification and irrigation infrastructure, and residential and commercial real estate.
The company has carried out projects in West Bengal, Jharkhand, Chhattisgarh and Sikkim. Central and state governments, state public works departments and a few private entities have been its main clients.
At present, the company has 16 ongoing projects aggregating to an order book of Rs 144.8 crore, of which work worth Rs 76 crore is yet to be completed. These projects will be executed over a time-frame of 12-18 months.
The top three projects are of the size of Rs 25-30 crore, which appears small. Kidco owns 28.4 acres of land at Zaheerabad, Andhra Pradesh, and 4 acres in Rajarhat, a Kolkata suburb. It is in the process of acquiring another 8 acres in Rajarhat, which will be concluded with a part of the issue proceeds.
The company registered a top line of Rs 54 crore in FY07, with operating margins of about 8 per cent.
Going forward, the poor margins are unlikely to improve significantly, unless the ticket size and the nature of projects changes drastically, along with the company’s clientele. Investors may want to wait for the company to gain some more ground, before betting on it.
Source: business-standard.com