Sensex up 258 points by close

October 25, 2007

The markets ended firm on Thursday with the benchmark index closing at 18,770 levels, up 1.4 per cent or 258 points.

In broader markets, the Nifty moved up 1.3 per cent or 73 points to end the day at 5,568 levels.

“The Nifty needs to close above 5,580 levels to make an attempt of breaching the previous high,” said Anil Manghnani, Director, Modern Shares & Stock Brokers

“The markets are expected to be volatile. It is better that investors stay clear for at least a week,” added Vikram Bhatt, Director, Ajmera Associates.

The markets are also awaiting the developments of the crucial SEBI meet that will decide on regulatory norms for the stock markets.

SEBI Chairman M Damodaran along with his team is unlikely to go back on its P-Notes stand on Thursday. However, it may rework eligibility criteria for FII registration to help investors.

In world markets, Wall Street recovered from steep losses Wednesday amid hopes for an imminent interest rate cut. According to preliminary calculations, the Dow ended flat with a marginal fall of 0.01 per cent.

The Standard & Poor’s 500 index fell 3.71 points or 0.24 per cent, while the technology-dominated Nasdaq composite index lost 24.50 points to end the day at 2,774 levels.

Back home, leading the charge at the Sensex was Tata Steel. The counter moved up over eight per cent or Rs 73. ICICI Bank, Maruti Suzuki India, Bharti Airtel, Wipro, Hindustan Unilever, Tata Motors, HDFC Bank and Mahindra & Mahindra were some of the other notable gainers.

However, Cipla at Rs 186 levels tanked five per cent. Dr Reddys, ACC, HDFC, Reliance Energy, Infosys Technologies, Satyam Computer, Reliance Communication, Ranbaxy, TCS and BHEL also closed in the red.

Metals hot

Among sectoral indices, the BSE metal index was the biggest gainer that moved up four per cent or 629 points. Jindal Saw, SAIL, Ispat Industries, Jindal Steel & Power, Sesa Goa, Bhushan Steel, Sterlite Industries and NALCO logged smart gains besides Tata Steel.

Banking scrips continued on their journey north with ICICI Bank surging 4.4 per cent or Rs 48. Bank of Baroda, Canara Bank, Punjab National Bank, SBI, Kotak Mahindra Bank, Centurion Bank of Punjab, Karnataka Bank and Axis Bank also held firm.

Amtek Auto (up 8.9 per cent), MRF Limited (up 6.1 per cent), Bharat Forge (up 4.1 per cent), Maruti Suzuki India (up 3.6 per cent), Tata Motors (up 2.4 per cent), Mahindra & Mahindra (up 1.7 per cent) and Exide Industries (up 0.7 per cent) raced ahead in the auto pack.

New listing

Maytas Infra made its debut at the bourses on Thursday. The stock listed at Rs 511 as against the Initial Public Offer (IPO) price at Rs 370.

The Hyderabad-based construction company and infrastructure developer was focused on irrigation, roads, bridges and buildings.

“We have a pan-India presence and have recently opened an office in Dubai. We are pursuing BOT projects in roads and other infrastructure projects. Some of the road sectors give us 12-13 per cent EBDITA margin,” said PK Madhav, CEO, Maytas Infra.

It is now positioning itself for water and waster water management, SEZ, ports and airport sectors. The stock closed at Rs 614 levels.

Source: ndtvprofit.com

Written by ITW Editor · Filed Under BOT, Infrastructure, Investment and Finance

Expressway toll may soon be linked to distance travelled

October 25, 2007

NEW DELHI, OCTober 24: In a move that is likely to benefit consumers just as much as it would India’s premier road development authority, National Highways Authority of India (NHAI) has said that expressways scheduled to come up under the National Highway Development Project (NHDP) would follow a ‘closed tolling’ system, which would charge users a toll calculated on the basis of distance travelled.

Under the format, access to every entry and exit point of these expressways would be controlled allowing the road operator to monitor distance traversed and accordingly charge the levy. “All the expressways which will come up under phase VI of NHDP will be implemented on a closed tolling format as these will be access-controlled roads,” said a senior NHAI official. “While users will have to pay only for the stretch of the road used, the road developer will also benefit from improved revenue collections from toll.”

According to the official, at present a significant number of expressway users — especially local ones — skirt the levy by entering and exiting expressways before coming to a toll point. Hence, collection efficiency on many of these ‘open-toll’ highways and expressways ranges between 70-80 per cent.

The 1,000 km of Build-Operate-Transfer (BOT) toll expressways envisaged to come up under the closed toll format, at an indicative cost of Rs 15,000 crore, would not only help private developers maximise earnings but also induce more customers to ply through them by enabling them to pay a more ‘realistic’ toll, says the official.

One of the first expressways slated to come up under the format is Haryana State Industrial Development Corporation’s 135-km Kundli-Manesar-Palwal (KMP) expressway, also known as the Western Peripheral Expressway. The Rs 1,800 crore expressway, the largest in the country, would provide a high-speed link between northern Haryana and its southern districts like Sonepat, Jhajjar, Gurgaon and Faridabad and sport hi-tech toll plazas at a number of points en-route.

“All entrances to the KMP expressway would be controlled and a ‘token’ — a smart card encoded with the issuing station’s information — would be provided to motorists at the time of entry into the system,” said Rafi Khan, general manager of DS Constructions, one of the concessionaires for the project. “The motorist can exit from any of the controlled locations and will be required to pay only for the distance travelled.”

A total of 10 such exit and entry points, including two main toll plazas at Kundli and Palwal, are planned on the expressway. With the closed tolling format in place, the developer expects to see 30,000 passenger car units roll on the road every day, with a projected robust growth of around 9-10 per cent every year once the project is completed in 2009.

With closed toll roads like the Ahmedabad-Vadodara expressway already operational and others like NHAI’s 134-km Eastern Peripheral Expressway in the offing, the stage seems set for a more consumer-centric toll system to become the norm on the country’s fast roads.

Consumer-Friendly

•Extension of 95-km Baroda-Ahmedabad expressway by 400 km to Mumbai

•Delhi-Agra

•Delhi-Meerut

•Chennai-Bangalore

•Kolkata-Dhanbad

Source: indianexpress.com

Written by ITW Editor · Filed Under Construction, Expressway, Infrastructure, Investment and Finance

Maytas Infra FY08 revenues seen at Rs 1,600 cr

October 25, 2007

Teja Raju, Vice Chairman, Maytas Infra said that FY08 revenues are seen at above Rs 1,600 crore while profits are seen at over Rs 100 crore. He added that EPS for FY08 will be seen at Rs 18-19.

According to Raju, they have an order book of Rs 4,500 crore, mostly to be executed in 18-24 months. He added that they have no intentions of entering into real estate and that they intend to focus on construction.

Raju said that they have tied up with a Thai company for the Hyderabad metro projects. He added that they are looking at tie-ups for small projects in South and North India.

Excerpts from CNBC-TV18′s exclusive interview with Teja Raju:

Q: What kind of numbers are you looking at in FY09 given the kind of order book that you have on hand now?
A: We did revenues of about Rs 800 crore last year. We are looking at maintaining 100% growth, so about 100% last year’s growth is what we are looking at.

Q: You are saying that you’ll do Rs 1,600 crore in FY08?
A: We’ll do close to Rs1,600 crore profit, would go by that percentage. We did Rs 53 crore last year, so hopefully it would be double than this year is what we looking at.

Q: So you will probably deliver more than Rs 100 crore in net profit at the end of this fiscal year?
A: That’s true, that’s what we are hoping to do. We are on track and we are very confident that we should be able to achieve that.

Q: That is pretty much higher than our estimates, if you do a Rs 100 crore plus on net profit, what’s your own target on an earnings per share as a company?
A: 18 or 19 is what I think the market is, so we should be around that.

Q: Can you explain to us what’s contributing to this big growth that you expect in this financial year and what is your order book and how much of it gets executed within this year to bring your revenue up to that figure?
A: We have an order of about close to Rs 4,500 crore and this order book is spread across sectors like the road sector, the irrigation sector, oil and gas pipeline and power division. Most of the order book are supposed to be implemented over the time frame of 18 months or 24 months. All these order books have crossed the initial hurdle of globalisation, which would typically take longer time. So this is where we are quite confident about the numbers, which we are projected on.

Also lot of new work is coming out in these sectors, especially the power sector and oil and gas sector where we expect lot of orders to be called from the government. So if we can win a few more orders this would ensure that we have achieved these numbers.

Q: You have no designs of getting into the real estate business?
A: No, we are not getting into real estate, we want to be focused on infrastructure, that is construction and BOT development project.

Q: What kind of visibility do you have for the next year, FY09? Do you expect it to continue to grow at a 100% even next year or this year or the growth rate should moderate somewhat?
A: Lot of it depends on the kind of order, which should be called up by the government. Especially, next year being the election year. There would be many aggressive contracts coming up from the government or there might be a bit of a slow down. It would be very difficult to credit so far, but in the last couple of years things look good but election year is always a bit difficult to credit.

Q: You’ve got a couple of interesting tie-ups as well for the construction side. Can you just talk about who you have tied-up with and do they kick off within the next four to six months?
A: We have tie-ups, both in the construction side as well as the infrastructure development sector. In infrastructure development we have qualified for the metro rail project in Hyderabad. We have tied up with the Italian-Thai of Thailand over there. For some small airports in Karnataka, we have tied up with Vienna airports. The government has announced a couple of airports in the North recently, so we are looking at new tie-ups over there. In the construction side, we work with a lot of companies, Nagarjuna Construction is one of them, Gayatri Infra, Soma Construction. So these are the various partners we have.

Source: moneycontrol

Written by ITW Editor · Filed Under BOT, Gayatri, Hyderabad, Infrastructure, Investment and Finance, Karnataka, Media

MSK Projects expects Rs 455 mn from Jalandhar project

October 24, 2007

Baroda-based MSK Projects (Q, N,C,F)* (India), a significant player in BOT projects, completed the construction of the Jalandhar bus terminus that handles the interstate and intrastate, private and government passenger bus vehicles of Jalandhar.

The project is expected to add Rs 454.86 million to the gross revenue of the company over a period of 7 years. The BOT (build, operate, and transfer) project will earn revenue for the company in the form of terminus fees, lease rentals of shops, passenger amenities, advertisements and parking fees. The traffic at this terminus is on an average 3,000 buses per day increasing at an average rate of 3% per annum thus making the project an excellent one.

“We are glad to provide quality infrastructure to the once cramped bus terminal which will help organize the traffic and provide recreational facility to the travellers. Transport being a key source of increased trade and commerce, the revamp of the Jalandhar terminus will not only improve the state productivity but also check the leakage of revenue“ said Amit Khurana, executive director, MSK Projects (India).

The company is in the process of completing a water supply project for Dewas Industries in M.P. This is the first water supply project executed purely on a public – private partnership basis. MSK Projects is also on the verge of completing the construction of Ludhiana Bus Terminus.

MSK Projects (India) is a civil construction company executing infrastructure contracts such as building roads. The company entered the field of industrial construction and undertook works such as mass housing and township, multi-storied buildings, industrial projects for coal mines, fertilizer plants, petrochemicals, water retaining structures, and have also successfully executed them. It is well established today in the field on infrastructure development, particularly roads on build- operate & transfer (BOT) basis.

Shares of the company declined Rs 1.10, or 1.07%, to trade at Rs 101.5. The total volume of shares traded was 13,921 at the BSE. (2.16 p.m, Wednesday)

Written by ITW Editor · Filed Under BOT, Investment and Finance, Projects

IDFC buys 48.4% in SMS Shivnath Infrastructure Ltd

October 22, 2007

SMS Infrastructure Ltd. and IDFC announced today that IDFC has purchased 48.4% equity in one of its SPV viz. SMS Shivnath Infrastructure Limited (SSIL). SSIL owns, operates and maintains an 18.4 kms 2-lane road on National Highway 6 which serves as a bypass to the city of Durg in Chattisgarh. The concession was awarded in 1997 by NHAI under a BOT format, and extends until 2031. The project is amongst the first concessions awarded by the National Highway Authority of India (NHAI).

Speaking on the occasion, Mr. Anand Sancheti, Managing Director of SSIL, said that “participation by IDFC, a leading financial institution in the infrastructure sector, in the equity of a Group company, reconfirms our business philosophy of creating enduring value in our businesses. This investment also marks the starting of a partnership approach, which would foster aggressive growth in the years to come in the chosen fields of road, waste management and power which the Group has embarked upon.

Dr. Rajiv Lall, MD & CEO of IDFC remarked “Our investment in SSIL is part of an important initiative to set up a new infrastructure fund to invest in the equity of operating and greenfield assets. SSIL will be one of the seed assets for this fund. IDFC will work with companies like SMS Infrastructure Ltd. to help in the creation and operation of infrastructure assets.”

Mr. M. K.Sinha, President & CEO of IDFC Project Equity Company Limited, remarked “The investment in SSIL is part of our build up of seed assets for the India Infrastructure Fund. We look forward to working with the SMS Group in building quality infrastructure assets in India.”

Source: moneycontrol.com

Written by ITW Editor · Filed Under BOT, Infrastructure, Investment and Finance, Projects

MSK Projects raises 336 mln rupees

October 22, 2007

MUMBAI (Reuters) – Construction firm MSK Projects India Ltd said on Monday it had raised 336 million rupees through a preferential issue to a private equity firm, which would help it bid for bigger toll projects.

MSK said it had issued 4 million shares to Subhkam Ventures at 84 rupees each, raising the latter’s stake in the company to 24.26 percent. Subhkam will now make an open offer for another 20 percent at the same price.

“We need money for our development. We have an existing relationship with Subhkam, so we agreed to this,” MSK’s Managing Director Ashok Khurana told Reuters. “We will be using this money for our BOT (build-operate-transfer) projects.”

The Baroda-based construction firm has forayed into toll road and water distribution projects and is also developing a couple of bus terminals. It has completed seven BOT projects and is currently doing two toll road projects.

After the fund infusion, the company will be able to bid for larger projects, Khurana said. It is also working on raising 3.5-4 billion rupees as debt for this purpose. “After this deal, the funding process will be completed,” he said.

Subhkam said it had not decided whether to take up a board representation, but retained an option for one board seat.

MSK shares, which hit a day’s high of 101.40 rupees on the news, ended at 100 rupees, up 3.5 percent in the Mumbai market.

Written by ITW Editor · Filed Under BOT, Construction, Infrastructure, Investment and Finance, Projects

DS Constructions forays into automated parking sector

October 12, 2007

DS Constructions Ltd., the pioneer in PPP infrastructure development and engineering construction in India, today announced that it has bagged an Automated, Multi-storey car parking project on BOT basis from New Delhi Municipal Council (NDMC). Located on the Kasturba Gandhi Marg near Connaught Place, the parking lot would be spread over 6200 sq mtrs and will have a capacity of accommodating 1500-1600 Equivalent Car Spaces (ECS). The concession period for the project is 30 years.

Speaking on the occasion, Mr. M S Narula, Managing Director of DS Constructions said, “Our vision is to be a leading Infrastructure developer and investor in India. We already have significant presence in the roads and highways, hydro power, railways and SEZ sectors and are actively pursuing Sea Port & Airport projects and today we are proud to have made our debut in the automated parking sector with this project. We are evaluating the opportunities in this sector and are keen to develop and invest in more such parking projects in the country.”

“This project holds grave importance owing to its magnitude and strategic location, as it lies in the heart of the sprawling business and commercial zone of the capital. We will be deploying the latest technology from Germany for multi-storey automated parking, with optimum space utilization to ensure that the facility accommodates the maximum number of cars. We are confident of completing the project much before the Commonwealth games.” Mr. Narula further added.

Source: moneycontrol.com

Written by ITW Editor · Filed Under BOT, Construction

CARE assigns A+ rating to NCD issue Era Infra Engg

October 4, 2007

CARE has assigned a ‘CARE A+ [Single A (Plus)]’ rating to the proposed Non Convertible Debentures (NCDs) aggregating Rs.100cr. of Era Infra Engineering Ltd.(EIEL), formerly known as Era Constructions (India) Ltd. These NCDs would be redeemed in 8 quarterly installments in 2nd and 3rd year from the date of allotment. Instruments with this rating are considered to offer adequate safety for timely servicing of debt obligations. Such instruments carry low credit risk.

CARE has reaffirmed a ‘CARE A+ [Single A (Plus)]’ rating to the Secured NCDs aggregating Rs.50cr. of Era Infra Engineering Ltd. (EIEL). . Instruments with this rating are considered to offer adequate safety for timely servicing of debt obligations. Such instruments carry low credit risk.

CARE has reaffirmed a ‘CARE A+ [Single A (Plus)]’ rating to the Unsecured NCDs aggregating Rs.100cr. of Era Infra Engineering Ltd. (EIEL). Instruments with this rating are considered to offer adequate safety for timely servicing of debt obligations. Such instruments carry low credit risk.

The ratings take into account EIEL’s experience in diversified construction activities, strong pre-qualification credentials, increasing order book position resulting in improved financial performance, reputed clients and positive outlook for the construction sector. However, the rating is constrained by increasing working capital requirements given the aggressive growth, increasing investment requirement for BOT projects, vulnerability to increasing competitive pressures given its relative size and inherent cyclical trends associated with construction sector.

EIEL, the flagship company of Era Group was incorporated in September 1990, promoted by Mr. H.S Bharana, a civil engineer by profession, having more than two decades of experience in construction industry. The company is engaged in construction activities of infrastructure, institutional, industrial, commercial and housing. EIEL has executed 65 projects in the last 16 years valued at Rs.650cr.

Total operational income of the company has increased 99% and 145% in FY’06 and FY’07 respectively due to increase in average contract size and its ability to execute projects as per time schedules.

Consequent to the increase in the total income, profitability of the company has also been rising consistently. PBILDT margin during FY’07 have increased from 15.64% to 18.35% due to increase in ticket size of the contracts and changing project mix towards high value turnkey contracts.

Overall gearing, however, has increased as on Mar 31, 2007 on account of issue of FCCBs and increase in borrowings to meet capex, investment in BOT and working capital requirements. On excluding FCCBs, overall gearing improves to 1.68 as on Mar 31, 2007.

EIEL has raised USD 75 million (Rs. 326 crs) through FCCBs in Jan’07 to fund capex plans and investment in BOT projects. As per FCCB terms, the conversion price will be decided in Jan’08 and conversion process would commence from Mar’08.

EIEL has issued 55 lakh fresh warrants to promoters and associates in May 2007 at a price of Rs.425. Application money equal to 10% (Rs.23cr.) has been received at the time of issue of these warrants. These warrants would be converted to equal number of equity shares in Nov 2008, expected to bring Rs.210cr. Besides, existing warrants issued in Dec 2005 at a price of Rs 135 would contribute Rs.48cr. towards equity in FY’08.

Liquidity as measured by current ratio is satisfactory at 2.78 times as on March 31, 2007. Company’s working capital requirements have been mostly funded from the borrowings during the year. Going forward, the liquidity of the company is likely be under pressure on account of increasing order book position, working capital intensive nature of operations, increasing order book position and increasing investments in BOT projects.

Source: moneycontrol.com

Written by ITW Editor · Filed Under BOT, CARE, Investment and Finance, Projects

IRB Infrastructure to tap market with 5.1 crore share float

October 4, 2007

MUMBAI: Another infrastructure to realty developer has sought the market regulator’s permission to tap the capital markets.

IRB Infrastructure Developers Ltd has lined up 5.1 crore share equity offering of Rs 10 each through 100 per cent book building process.

IRB Infrastructure was formed to fund the capital requirement of the IRB Group’s initiatives in the infrastructure and construction sectors. It has extensive experience in roads and highways and is working on build/own/transfer projects like the Mumbai-Pune Expressway and Bharuch-Surat section of National Highway 8. It has also diversified into real estate development.

As a part of its business strategy, the company now proposes to invest in its subsidiary IDAA and make prepayment and repayment of its existing loans and the subsidiaries through the net proceeds.

In January 2007 it formed a consortium with Deutsche Bank AG Singapore Branch to jointly bid for certain road infrastructure projects.

The Hong Kong branch of Deutsche Bank, Jade Dragon (Mauritius)-a subsidiary of Goldman Sachs, and CPI Ballpark Investments of Merrill Lynch each hold 3.85 per cent stake in IRB Infrastructure.

Deutsche Equities India and Kotak Mahindra Capital are book running lead managers to the issue.

Written by ITW Editor · Filed Under BOT, Expressway, Infrastructure, Investment and Finance

IRB Infrastructure files DRHP with SEBI

October 3, 2007

IRB Infrastructure Developers Limited, an integrated infrastructure development and construction company in India with significant experience in the roads and highways sector, proposes to enter the capital markets with a public issue of 51,057,666 Equity shares of Rs 10 each through 100% book building process.

It has also diversified into the business of real estate development sector. It has filed DRHP for this purpose with SEBI. Deutsche Equities India Private Limited is the Sole Global Coordinator and BRLM for the Issue and Kotak Mahindra Capital Company Limited is the Co-BRLM for the Issue.

IRB Infrastructure Developers Limited is the holding company of the IRB Group. The Company was formed to fund the capital requirement of the IRB Group’s initiatives in the infrastructure and construction sectors. Its infrastructure development portfolio includes several large BOT projects in the road sector, including the Mumbai-Pune Express Highway and NH.4 BOT project and the BOT project for the Bharuch to Surat section of NH.8. In January 2007.

It has formed a consortium with Deutsche Bank AG Singapore Branch to jointly bid for certain road infrastructure projects.
As a part of its business strategy, the company now proposes to invest in its subsidiary IDAA and make prepayment and repayment of existing loans of the Company and the Subsidiaries through the net proceeds of the Issue.

Deutsche Bank Hong Kong Branch, Jade Dragon (Mauritius) Limited (a subsidiary of Goldman Sachs) and CPI Ballpark Investments Limited (a subsidiary of Merrill Lynch) each hold 3.85% stake, and Somerset Emerging Opportunities Fund hold 0.54% stake in the equity share capital of the company.

The Company’s infrastructure development business involves construction, development and operation of infrastructure development projects. It is an established infrastructure company in the roads sector in India and has a large portfolio of completed and operational BOT projects in the Indian road infrastructure sector.

The Company’s construction business complements its infrastructure development business and involves engineering, procurement and construction work for construction project on a contractual basis, including in the roads sector.

Source: indiainfoline.com

Written by ITW Editor · Filed Under BOT, Infrastructure, Investment and Finance, Projects