After wrapping up a Rs400 crore stake sale to the India arm of 3i Group Plc., a London-based private equity firm, Soma Enterprise Ltd plans to focus more on its infrastructure development business.
As a result, the Hyderabad-based firm, which has orders worth at least Rs6,000 crore, is looking to invest the money in BOT, or build operate transfer, projects in hotels, roads and hydroelectric power.
The company has four road projects on the BOT model, where the concessionaire has the right to operate the project for a specified period of time.
Soma’s plans are typical of civil engineering and construction firms that branch out into BOT,?say?analysts.?“Soma is one of those construction companies that have been under the radar,” says Arvind Mahajan, who heads the infrastructure practice for consultant KPMG.
“We have put in bids for six-lane projects of the National Highways Authority of India (NHAI),” says Ankineedu Maganti, director at Soma. The projects are expected to be submitted by next week. Evaluation could take another month, he adds.
The six-lane project is among the largest of all NHAI projects, with an estimated cost of $2 billion (Rs7,900 crore), and in discrete projects that are 100km of such roads or more. The bidding process is at an advanced stage, says an analyst who helped set up the project, with firms having submitted their initial bids.
Soma has also bid for two hydroelectric dam projects in Arunachal Pradesh, where it had helped build the 2,000MW Subansiri Lower hydroelectric project. The state is expected to announce the concessionaires within two months.
Soma also plans to diversify into oil and gas pipelines as well as railway BOT projects. “We’ve been qualified for a transit centre project in Bangalore, which will integrate metro, bus and train services, and are currently working on financial bids,” Maganti said.