To focus on BOT projects: maintain 10% mkt share: IRB

With the infrastructure space taking a beating in the last one year the question is are things improving for the sector.

VD Mhaiskar, chairman & MD of IRB Infrastructure is quite upbeat on the sector's future. According to him there is likelihood of additional bids being announced for build, operate and transfer (BOT) projects of around 2000-3000 kms. So the company aims to focus on BOT projects and not look aggressively at engineering, procurement and construction (EPC) projects, said Mhaiskar.

NHAI has announced to award around 8000 kms projects out of which 5000 kms would be bid for EPC and rest would be BOT projects.

For the completion of the ongoing projects the company would require equity to the tune of Rs 3500 crore said Mhaiskar. However, they plan to maintain the debt-equity ratio at 3.3:1 or try to maintain it at 3:1, he added

As of now the company hasn't decided on how they would raise funds and would look at appropriate options when the time comes.

The company aims to maintain its current market share of 10%

Below is the verbatim transcript of VD Mhaiskar's interview on CNBC-TV18 with Latha Venkatesh and Sonia Shenoy.

Q: What are you seeing in terms of the pipeline of projects that NHAI has awarded?

A: NHAI has been on record saying that they want to award almost 8000 kms plus in the present financial year. And to our understanding around 5000 kms would get bid out on EPC while the rest would be bid out on BOT basis.

As regards the IRB is concerned we have already backed 450 kms of projects in this financial year. So in terms of our market share we would be doing more than 10% this year, and going forward we would like to maintain our market share.

Q: You will require roughly Rs 3,500 crores of equity in the next 3 to 4 years, would it be through Q-I-P or some capital raising plans be likely?

A: You are right the projects in hand would require an investment of around Rs 3,500 crores of equity going forward and although we have a strong balance sheet, good cash accruals, we would take an appropriate decision at an appropriate time with regard to ensuring that the debt equity ratio doesn't go beyond 3.3:1 or maybe more comfortably at 3:1. So we would look at options going forward at an appropriate time.

Q: By when can we expect any fund raising announcement?

A: We have not crystallised anything as yet, but with the Bombay-Pune order coming in yesterday, certainly we would look at this requirement more closely now. And we'll come out with more clarity soon.

more to come

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