Omaxe plans new ventures in power transmission, airport infrastructure

Omaxe plans new ventures in power transmission, airport infrastructure
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First Published: Fri, Oct 19 2007. 01 06 AM IST
Updated: Fri, Oct 19 2007. 01 14 PM IST
Real estate developer Omaxe Ltd is entering into the power transmission and airport infrastructure business in an effort to tap emerging opportunites in these sectors in one of Asia’s fastest growing economies.
The company has earmarked an initial investment of around Rs100-200 crore for its infrastructure business. Omaxe plans to set up power transmission lines in states such as Uttarakhand and Punjab. This will be done either in partnership with the state or Union government or other private agencies.
“We will set up power transmission lines because we feel there are lot of opportunities in the infrastructure business,” said Rohtas Goel, chairman and managing director of Omaxe, while announcing the company’s results for the second quarter of 2007-08—the first such announcement after the company listed its shares in August.
A new unit, Omaxe Power Pvt. Ltd, will manage the power business. And another wholly owned subsidiary, Omaxe Infrastructure and Construction Pvt. Ltd, will look at opportunities in upgradation of airports and building roads and freight corridors.
Omaxe reported a consolidated net profit of Rs160.35 crore for the second quarter ended September on sales of Rs712.11 crore. The company did not give comparable figures for the year-ago quarter.
“The growth in profits is basically because of higher margins on account of appreciation in our land value,” said Goel. “Some of our projects launched during this fiscal were built on land that we acquired years ago at a much cheaper price,” he added.
For the six months ended September, the company posted a consolidated net profit of Rs233.70 crore compared with Rs103.3 crore during the same period in 2006-07. This number was available in the company’s filing with the stock market regulator in December 2006 in the run up to its initial public offering. And revenues rose 78% to Rs1,054.57 crore from Rs592.5 crore.
Omaxe raised Rs577 crore from its August initial public offering. Around Rs228 crore of this has been used to repay debts and to acquire land. Currently, the company has a cash surplus of around Rs 450 crore.
Omaxe is also entering the hospitality business in keeping with the trend of real estate companies looking at opportunities in related businesses such as hospitality, health care, and infrastructure development. The company is developing nine budget hotels in smaller cities in North India such as Faridabad and Lucknow. Omaxe will be investing Rs600 crore in its hotel business. Goel said the company was looking for a foreign hotel chain that could manage its hotels.
Omaxe has a land bank of 3,255 acres with a developable area of 150 million sq. ft.
On Thursday, shares of Omaxe fell 4.22% to close at Rs309.55 each on the Bombay Stock Exchange. The exchange’s benchmark index, the Sensex, fell 3.83% to close at 17,998.39 points.
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First Published: Fri, Oct 19 2007. 01 06 AM IST