With infrastructure investment and project development in India heading positively north, H.G. Infra Engineering Limited is launching an IPO of Rs 263 to Rs 270 per equity share – aggregating Rs 300 crores – from February 26 to February 28. The company is focusing on expanding its geographical footprint nationally including in Gujarat, Punjab and Madhya Pradesh.
The company’s order book witnessed strong business coming from Maharashtra (48%) and Rajasthan (45%), Harendra Singh, CMD, said here today, adding, “We are now also expanding and diversifying into business beyond roads and highways to include railways, airport runways, metros, water treatment and sewerage-related projects.”
Noting that the company was mainly into UPC projects, he said it had major CAPEX additions done during the GST regime and its debt stood at Rs 350 crore. “Our total Order Book upto November 2017 stands at Rs 37,078.10 million with 21 ongoing projects in the Road and Highways sector that include seven EPC construction projects in Maharashtra by MoRTH (amounting to Rs 19,045.94 million) and two by the NHAI,” he said, while noting that the focus is on adopting advanced technologies in construction equipment, upgrading workforce training and IT systems to reduce manual intervention and maximize asset utilization in construction activities.
“The company will also selectively explore opportunities of undertaking projects on the Government’s newly-introduced “Hybrid Annuity Model” (HAM) basis by evaluating the investments required and selecting projects where the risk and reward profile is favourable,” Singh added.
Date from the Department of Industrial Policy and Promotion (DIPP) showed that the Indian Government’s reformative policies resulted in total FDI inflows of approximately US $9.8 billion for construction activities in infrastructure from April 2000 to March 2017, according to a CRISIL report.
Actual investment in the infrastructure sector reached Rs 27.3 trillion during fiscal 2008 to fiscal 2012, — driven primarily by the Central Government’s focus on improving domestic infrastructure. The second report of the High Level Committee on Financing Infrastructure, the construction spend on infrastructure projects during fiscal 2013 and 2017 is estimated at Rs 30.93 trillion – increasing from Rs 10.3 trillion as at fiscal 2014. Of the total spend, the private sector is estimated to contribute 39%, whereas the remaining 61% is to be contributed by the Central and State Governments.
Government Investment in: Road sector rose from Rs 5.3 trillion (during Fiscal 2008 to 20120 to Rs 5.8 trillion (Fiscal 2013 to 2017; Railways from Rs 2.3 trillion (2008-2012) to Rs 3.4 trillion (2013-2017); Water Supply and Sanitation from Rs 1.4 trillion (2008 to 2012) to Rs 1.5 trillion (2013-2017). However, Government investment came down in Airports from Rs 0.4 trillion (2008-2012) to Rs 0.3 trillion (2008-2017) as private participation in airport infrastructure outpaced expenditure by the Government which has also been looking to further boost private investment in greenfield and non-metro airports.
Investment of Rs 4.30 trillion is expected for national highways between Fiscal 2018 to 2022 – up by 2.9 times in the next five years – with Government accounting for half this amount, the CRISIL report stated.
