Gayatri Projects achieves financial closure for 2 SPVs

December 5, 2007

Hyderabad-based leading infrastructure company, Gayatri Projects ltd, has achieved financial closure of Rs 932.71 crore ahead of the stipulated time for its two road projects, to be developed through special purpose vehicle (SPVs), at an interest rate of 11 %.

IL&FS has syndicated the entire debt and United Bank of India is the leader of the consortium of lenders for both the SPVs.

The projects undertaken by Gayatri Projects Ltd-led consortium are Hyderabad expressways pvt ltd (HEPL) and Cyberabad expressways pvt ltd (CEPL) with a project costs of Rs 430.96 crore and Rs 501.75 crore respectively.

While the total syndicated debt in case of HEPL is Rs 290.90 crore, it is Rs 376.31 crore for CEPL.

The infrastructure major-led consortium had won the bid for the HEPL and CEPL—the eight lane outer ring road projects— floated by Hyderabad Urban Development Authority (HUDA).

The construction period for both the HEPL & CEPL is 2 years and six months. HUDA will pay a semi-annual annuity of Rs 30.49 crore to HEPL during the annuity period of 12 years six months while the semi-annuity amount is pegged at Rs 39.50 crore in case of CEPL for the similar period.

Source: moneycontrol.com

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

Gayatri Projects SPVs achieve financial closure

December 4, 2007

Gayatri Projects Ltd has announced that the Company has achieved the financial closure for the Company’s following Hyderabad Outer Ring Road Projects (SPV’s) at an interest rate of 11% p.a., ahead of the stipulated time given by the Employer namely Hyderabad Urban Development Authority (HUDA).

Financial Closure of Hyderabad Expressways Pvt Ltd (HEPL) – Total cost of the Project Rs 430.96 crores: M/s. Hyderabad Expressways Pvt Ltd promoted in Consortium, by the Company as lead technical member, with 50% share holding, bid and won road project (AP-IV) for design, construction, development, finance, operate and maintain eight lane access controlled expressway under Phase II programme of outer ring road (ORR) of Hyderabad Urban Development Authority. The concession Agreement was signed on August 17, 2007. The total debt syndicated for this Project is Rs 290.90 crores.

IL&FS (IL&FS Financial Services Ltd) has syndicated entire debt and United Bank of India is the Leader of the Consortium of Lenders for the SPV.

Details of the package awarded are as follows: AP IV – from Bongulur to Tukkuguda from km. 108 to km. 121 on BOT – Annuity basis. Estimated Project Cost incl. IDC is around Rs 430.96 cr. and the project has a positive Grant of Rs 71.86 crores. HUDA will pay a semi-annual annuity of Rs 30.49 crore to HEPL during the Annuity period. The concession period door-to-door is 15 years, with. a construction period of 2 years 6 months and Annuity period of 12 years 6 Months.

Financial Closure of Cyberabad Expressways Pvt Ltd (CEPL) – Total cost of the Project Rs 501.75 crores: M/s. Cyberabad Expressways Pvt Ltd promoted in Consortium by the Company as lead technical member with 50% share holding, bid and won road project (APII) for design, construction, development, finance, operate and maintain eight lane access controlled expressway under Phase II programme of outer ring road (ORR) of Hyderabad Urban Development Authority.

IL&FS (IL&FS Financial Services Ltd) has syndicated entire debt and United Bank of India is the Leader of the Consortium of Lenders for the SPV.

Details of the package awarded are as follows: AP II – from Kollur to Patancheru from km. 12 to km. 23.70 on BOT – Annuity basis. Estimated Project Cost incl. IDC is Rs 501.75 crores and the project has a positive Grant of Rs 81 crores. Annuity – Rs 79 cr. p.a. HUDA will pay a semi-annual annuity of Rs 39.50 crore to CEPL during the Annuity period. The concession period door-to-door is 15 years, with a construction period of 2 years 6 months and Annuity period of 12 years 6 Months. The concession Agreement was signed on August 17, 2007. The total debt syndicated for this Project is Rs 376.31 crores

The Company is a pioneer in construction of National Highways, Dams, Canals, Aquaducts, Flyovers, Coal handling plants, Bridges, Railway Projects, Airport Runways, BOT Toll and Annuity Road Projects as develop and Industrial Constructions.

Source: equitybulls.com

Written by ITW Editor · Filed Under BOT, Construction, Expressway, Gayatri, Highway, Hyderabad, Infrastructure, Investment and Finance, Larsen & Toubro Ltd. (L&T), NHAI, Projects

Toll policy change may rationalize annual hikes

December 4, 2007

Under the proposed policy, only 40% of the WPI will be taken into account while revising the rates

New Delhi: Even as tolled roads are becoming a norm in the country with the government handing over more highway projects to the private sector, a new tolling policy is seeking to limit the annual increase in toll rates.

As of now, toll rates are revised every year and concessionaires are compensated in full as per the increase in the wholesale price index (WPI). But under the new policy, which is yet to be placed before the cabinet for approval, only 40% of WPI will be taken into account while revising the toll rate. This is apart from a fixed component of a 3% increase every year.

As many as 54 highway construction packages of around 320 projects awarded under the National Highway Development Programme were “build operate and toll” projects. According to Planning Commission member Anwar-ul-Hoda, the idea behind changing the structure of toll revision was to ensure that the concessionaires are paid only their due share while fixing annual hikes on toll.

“The input costs of the concessionaire mostly occur many years before they begin to collect toll. So why should the toll revision be based on the wholesale price index of the current year?” asks ul-Hoda.

An official with the National Highways Authority of India (NHAI) also said that many components of WPI did not directly affect the highway construction industry.

The CEO of the roads division of the GMR Group, Rajan Krishnan, said his company was neutral to the proposal as WPI was difficult to predict. “Even the best economists cannot clearly track the movement of WPI. This is just a matter of mathematical modelling,” said Krishnan.

According to Krishnan, however, concessionaires stood to gain from the new policy so long as WPI was less than 5%. But when WPI moves beyond 5%, the toll rate to be charged under the new proposal would be lower than what is currently collected, he added.

Nirmaljit Singh, member, technical, NHAI, said the proposal was with the ministry of road transport and highways, from where it would be sent to the cabinet for clearance.

“I just think you are increasingly reaching a situation where the risk-reward equation is being changed against the government,” said an analyst with a consulting firm, who did not wish to be identified. “The government is taking more and more of the risk. You don’t need to guarantee a 3% increase every year when concessionaires had already accepted the earlier policy (where fee revisions were tied only to WPI),” the analyst said.

According to accepted wisdom, the government passes on fewer risks—such as those associated with traffic—to the concessionaire when evolving a public-private partnership policy and as the market evolves, passes on more of the risks. However, this administration is doing the opposite, the analyst said.

The analyst cited the example of the recent move away from “negative grants”, a term for upfront money paid to the government for the privilege of winning a concession, over and above the cost of the project. Mint had earlier reported plans to do away with negative grants in favour of a revenue-share model, where NHAI would derive a percentage of revenues from toll roads. “By going for revenue sharing, the government is taking more risks,” the analyst said.

Source: livemint.com

Written by ITW Editor · Filed Under BOT, Construction, Expressway, Highway, Infrastructure, Investment and Finance, NHAI, NHDP, Sensex, Toll Management System, Tolling

Work on ECR project resumes

December 2, 2007

It was suspended due to heavy rain

Project expected to be completed by March 2009 Estimated cost: Rs.2,160 crore

PUDUKOTTAI: Work on the World Bank-funded East Coast Road (ECR) project, which remained suspended for about a month following sharp showers in the coastal parts of the district, resumed recently.

Being a coastal belt with estuaries, rivulets and the Vellar, the major river of the district, the work involves construction of culverts and minor bridges at several places in the 36-km-long stretch. Work on construction of a minor bridge or culvert has been undertaken every couple of km between Kattumavadi and Kottaipattinam, about 70 km from here.

Authorities of the Tamil Nadu Road Sector Project (TNSRP), which is executing the Rs.2,160-crore project of laying the 742-km road from Arcot to Tuticorin, suspended the work as a vast stretch of newly laid and levelled earth on the ECR stretch turned slushy at places such as Kottaipattinam, Kattumavadi and Manamelkudi. The overflowing water from the culverts brought all work to a grinding halt.

The project, which started in February 2004, is expected to be completed by March 2009. Of the total outlay of Rs.2,160 crore, a sum of Rs.1,148 crore will be utilised to upgrade the ECR, TNSRP sources told The Hindu. The upgrading work includes strengthening of the earth and ensuring technical stability of the area to suit the huge volume of heavy vehicles. With the receding of rain water, work resumed last week, the sources said.

The project is being executed through meticulous planning, covering a stretch of 387 km between Arcot and Tiruvarur and 355 km between Nagapattinam and Tuticorin.

Source: hindu.com

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

Kaushalya Infrastructure IPO oversubscribed

November 23, 2007

The IPO has so far received 6,11,97,500 bids, giving it a subscription of 7.20 times over the issue size of 85,00,000 equity shares

IPO The Public Issue of Kaushalya Infrastructure Development Corporation Limited (KIDCO) has been oversubscribed as per the information available on the websites of the stock exchanges. The IPO has so far received 6,11,97,500 bids, giving it a subscription of 7.20 times over the issue size of 85,00,000 equity shares. KIDCO is a diversified infrastructure development company from eastern India, and is offering the shares at a price band of Rs. 50 to Rs 60 per share. The net issue to the public would constitute 40.93 per cent of the fully diluted post issue paid-up capital of the Company. The issue closes on 23rd November.

As a part of its expansion plans, KIDCO will mainly utilize funds for acquisition of land, land development rights & real estate development, investment in BOT/BOOT projects and joint ventures and for the purchase of capital equipments comprising construction & infrastructure equipments for execution of projects .

The infrastructure development operations of the Company are organized in three major business divisions viz. Kaushalya Nirmàn (Specializes in construction of roads, highways, bridges and industrial infrastructure), Kaushalya Gràm (Specializes in Electrification and Irrigation projects focused on development of rural India) and Kaushalya Parivàr (Specializes in Construction of Commercial & Residential Complexes). The key clients of the Company include various Government Undertakings, State Public Works Departments, as well as State and Central Public Sector Undertakings.

Says Prashant Mehra, managing director of KIDCO, “We are on the expansion mode and would be focusing more upon diversified sectors so as to leverage and expand the operations. After our successful journey in the Eastern part of the country, we are spreading our operations to other parts like the Central India.”

KIDCO aims to operate into diversified sectors such as townships, offices, houses and other buildings, urban infrastructure, highways, roads, power systems, irrigation, dams and agriculture systems, etc. which will mitigate business risk in case of slowdown in any one particular field in the future.

The proposed issue will be lead managed by SREI Capital Markets Limited and the Registrar to the issue will be Intime Spectrum Registry Limited.

Source: indiainfoline.com

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

Maytas-NCC consortium wins airport projects from Karnataka

November 22, 2007

Two separate SPVs are to be set up for the airport projects. Maytas Infra, NCC and VIE will hold 37%, 37% and 26% stake in the two SPVs, respectively

Maytas Infra Ltd. announced on Tuesday that a consortium involving itself, NCC Infrastructure Holding Ltd. and VIE India Project Development and Holding LLC has bagged an order to develop and operate proposed airports at Gulbarga and Shimoga on BOT (build-operate-transfer) basis.

The contract has been awarded by the Infrastructure Development Department of the Karnataka Government.

Two separate Special Purpose Companies (SPVs) are to be set up for the airport projects. Maytas Infra, NCC and VIE will hold 37%, 37% and 26% stake in the two SPVs, respectively.

The construction period is 24 months from the date of signing the agreements. The concession period is 30 years and the agreement can be extended for a further period of 30 years.

Source: indiainfoline.com

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

Avoid Kaushalya Infrastructure IPO: SPA Sec

November 21, 2007

SPA Securities has come out with report on Kaushalya Infrastructure Development Corporation IPO. It has recommended ignoring the issue.

Kaushalya Infrastructure Development Corporation has opened for subscription with an IPO of 85 lakh equity shares of Rs 10 each at a price band between Rs 50 and Rs 60. The issue will close on November 23.

SPA Securities report on Kaushalya Infrastructure IPO

Investment Highlights

KIDCO has shown a CAGR of 45% in the topline; 67% in OPM & 62% in the bottomline in the last three years.
Investment Rationale: KIDCO is engaged in well-diversified construction activities including civil and commercial projects and infrastructure development and Real-Estate Projects. It has executed various infrastructure development projects and commercial and residential complexes. Registered as a class IA contractor. Order book at Rs 76.01 crore of the total contracts under-execution value of Rs 144.84 crore executable in next 18-24 months. Focus on under developed areas of Eastern India, viz., West Bengal, Chattisgarh, Jharkhand & Sikkim, which provides immense potential for growth. Company for its construction and development of quality housing in West Bengal has entered into a Joint Venture with West Bengal Housing Board (WBHB) and formed Bengal KDC Housing Development Ltd.
Concerns are: Low margin road business comprises almost 75% of the order book. Low networth therefore cannot bid for big contracts. Sales/Networth ratio of less than 4x against the industry average of 10x. Low debtors turnover ratio of 2. Allocation of issue proceeds to too many heads. Small allocation of Rs 12 crore for BOT/BOOT projects.
For the quarter June 2007, the company recorded a topline of Rs 16.20 crore, operating profit of Rs 2.13 crore and posted a PAT of Rs 1.09 crore translating to EPS of Rs 4.32 (annualized) & RoNW of 19.20%
Order book as on 30 June’07 is of Rs 76 crore. The order book break is: Road Projects 75%, Infrastructure projects 21% & Other Projects 4%.

Valuation: The stock is currently available at a P/E of 25x to 30x on the lower & upper price bands respectively of its post issue FY07 EPS of Rs 1.98. The stock is expensive among its peer group which is trading at much lower P/E multiple range of 8x to 16x. On EV/EBIDTA, the company is valued at 20-23x which too is very expensive vis-à-vis its peers which is trading in range of 11-21x EV/EBIDTA. Company posted OPM of 11.27% & NPM of 7.14% in FY07, which is mediocre performance in the industry. On the basis of its high exposure to low margin business of Road Projects (75% of the order book) we are of the view that margins will not increase much going forward. Real Estate projects will start contributing only after 18-24 months from here, as construction on its acquired land has not started till the filing of the public issue. Hence, we recommend ignore the issue.

Source: moneycontrol.com

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

Cial has non-metro, foreign airports on radar

November 21, 2007

It plans to participate in the modernization of the 35 airports in the country, apart from the overseas projects

New Delhi: Cochin International Airport Ltd (Cial), the company that built the new international airport at Kochi, India’s first to be built by a private sector firm, is looking to build airports in India and in other countries in an effort to tap growing demand for airline infrastructure in many parts of the world.

Cial plans to participate in the modernization programme of 35 non-metro airports in the country and also wants to build airports in Sri Lanka, Ghana, Angola and Papua New Guinea, according to S. Bharat, managing director, Cial.

Cial was promoted by the Kerala government, financial institutions, airport service providers, non-resident Keralites and a group of entrepreneurs.

The single largest shareholder in the company is the state government with 35% of the paid-up capital.

Bharat added that Cial is in talks with an international finance company and a technical partner to promote a new company that will handle these projects.

Cial’s overseas plans come at a time when international airport operators such as Singapore’s Changi Airport International (CAI), Airport Company South Africa Ltd, Fraport AG and other leading players from Mexico, Turkey, Paris and Germany are looking to partner with Indian companies to bid for airport projects in the country. Singapore’s CAI had floated a joint venture company with Tata Realty & Infrastructure Ltd, a subsidiary of the Tata group for the airport modernization projects in India.

If it wins any of the projects to build airports outside the country, Cial will be following in the footsteps of Bangalore-based GMR Infrastructure Ltd, the lead partner in the consortium that runs Delhi International Airport, which will be developing Sabiha Gokeen International Airport (SGIA) at Istanbul, Turkey. GMR’S partners in this project are Malaysia Airports Holdings Berhard and Limak Insaat Sanavi San Ve Tic A S Turkey.

Bharat confirmed Cial’s overseas aspirations.

“The government of Sri Lanka has invited us to study the possibilities of building an airport there. We have got offers from Ghana, Angola and Papua New Guinea. Cial’s team will shortly visit those countries,” he said.

Cial plans to take up overseas airport projects on a build-operate-transfer (BOT) or build-own-operate (BOO) basis. Under the BOT model, the developer constructs and manages a project for a specified time before handing it over to the government; in the BOO model, the developer continues to operate the project with a local partner.

“The funding of these airport projects would be done by a special purpose company formed under Cial,” Bharat said.

He declined to name the international partners citing confidentiality agreements.

“We are also looking at bidding for the ongoing airport projects within India as we can make airports at lower cost,” Bharat added. The Cochin airport was built at a cost of Rs315 crore including the cost of land.

A government committee on infrastructure, headed by Prime Minister Manmohan Singh, has estimated that India will need to spend more than Rs40,000 crore in developing airports between 2006-07 and 2013-14. Of this, an estimated Rs31,100 crore is expected to come from public-private partnerships.

The ministry of civil aviation has decided to modernize and upgrade 35 non-metro airports across India.

Besides, the government is also planning to build greenfield airports at Navi Mumbai (Maharashtra), Kannur (Kerala), Hassan and Gulbarga (Karnataka), Ludhiana (Punjab), Greater Noida (NCR), Paykong (Sikkim), Cheithu (Nagaland) and Chakan (near Pune, Maharashtra).

“At a time when current airport modernization programmes envisage spending at least Rs5,000 crore for a single project, Cial had built a world class product on a very modest budget. Cial can cash in on its expertise in the upcoming non-metro airport projects,” said a Mumbai-based aviation analyst, who does not want to be identified because he is not authorized to speak to the media.

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

Market stays in red

November 21, 2007

At 13:07pm (IST),the BSE 30-share Sensex lost 324 points to 19,956 and NSE Nifty was down 99 points at 5,681.

Markets continue to stay in negative territory in the afternoon trades as selling pressure prolongs. The IT stocks are witnessing fresh buying momentum as the IT bellwether; Infosys, TCS and Satyam Computer are trading in green. IT index is the only gainer up (0.3%).

All the other key sectoral indices continue to be in red, the BSE Bankex index (down 3.5%), BSE Power index (down 3.3%) and BSE Capital Good index (down 3%).

At 1:07 pm (IST), the BSE 30-share Sensex lost 324 points to 19,956 and NSE Nifty was down 99 points at 5,681.

GSPL has gained 1% to Rs77 after reports stated that the company would invest Rs2500cr on new pipeline it also would add 850km of gas Pipeline in next year. The scrip has touched an intra-day high of Rs79 and a low of Rs73 and has recorded volumes of over 10,00,000 shares on NSE.

Fortis Financial has surged by over 5.5% to Rs105 after the company announced that it purchased 76% stake of UK’s Capital Market Solution. The scrip has touched an intra-day high of Rs109 and a low of Rs102 and has recorded volumes of over 14,000 shares on NSE.

Tata Steel is down 3% to Rs832. Reports stated that the company is launching a mega rights issue of Rs100bn to repay the bridge loans raised for funding the acquisition of Corus for US$12.9bn. The scrip has touched an intra-day high of Rs878 and a low of Rs831 and has recorded volumes of over 7,00,000 shares on NSE.

L&T has slipped 3% to Rs4205. The company yesterday signed a MoU with Raytheon Company, US, to develop defence technology for the Indian military forces. The scrip has touched an intra-day high of Rs4335 and a low of Rs4145 and has recorded volumes of over 3,00,000 shares on NSE.

Mytas Infrastructure has dropped by over 5% to Rs920. The company yesterday said a consortium the company, NCC Infrastructure Holdings and VIE India Project development and Holdings bagged the BOT contract to develop and operate airports at Gulbarga and Shimgo in Karnataka The scrip has touched an intra-day high of Rs1010 and a low of Rs905 and has recorded volumes of over 1,00,000 shares on NSE.

Strides Arcolab is trading flat at Rs291 the company yesterday announced that it would be selling 50% stake in Strides Latina to Aspen, South Africa, for US$152mn. The scrip has touched an intra-day high of Rs324 and a low of Rs290 and has recorded volumes of over 35,000 shares on NSE.

Ansal Housing is down over 3.8% to Rs179. The company declared that they have planned to raise Rs353.6mn in warrants sale. The scrip has touched an intra-day high of Rs188 and a low of Rs175 and has recorded volumes of over 19,000 shares on NSE.

HPCL has lost over 5% to Rs285. Reports stated that the company planned to spend US$4.5bn on exploration, gas marketing and petrochemicals by 2012. The scrip has touched an intra-day high of Rs304 and a low of Rs284 and has recorded volumes of over 8,00,000 shares on NSE.

Source: indiainfoline.com

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

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

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

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