Western, northern region cos dominate infrastructure space

November 23, 2007

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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