Around 30 construction firms are planning to raise close to Rs2,000 crore over the next 12-16 months from the capital market through initial public offerrings (IPOs), according to the first-ever Dun & Bradstreet India survey of Indian infrastructure companies. D&B is an information services company.
These construction firms include small and mid-sized companies such as the Hyderabad-based SVEC Construction Ltd, BGR Energy Systems Ltd, Bangalore-based Brigade Enterprises Ltd, New Delhi-based Vijai Infrastructure Ltd and Brahamputra Consortium Ltd.
The survey profiled 187 infrastructure service providers across construction, power and telecom sectors. “What we have tried to do with this survey is provide a bird’s-eye view of what the companies in these sectors think of themselves and the sector,” said Kaushal Sampat, chief operating officer, D&B India.
The D&B India survey profiled 121 firms in the construction sector, including real estate developers, 52 power companies, including generation, transmission and distribution companies, and 14 telecom companies.
While 20 of these construction companies have already filed red herring prospectus with the market regulator, Securities and Exchange Board of India (Sebi), the other 10 are expected to do so shortly.
Most of this money will be used to fund ‘build own operate transfer’ projects in the roads, ports and highways sectors, and buy construction equipment, the D&B India survey said.
The Bombay Stock Exchange’s 14-stock realty index has moved 28% from 7,377.53 points since its inception five months ago to close at 9,457.37 points on Thursday. Several of the companies that are part of the index have been included in the survey.
The survey has found that the majority of the large-scale construction companies are involved in the development of information technology (IT) parks and special economic zones (SEZ), and most of the smaller companies are in the residential segment.
“The build and sell model suits the cash flow requirement of the smaller companies, while the larger companies seem more comfortable with the lease model, where the cash flows come in later,” Sampat said.
The D&B survey also found that most of the companies felt the public-private partnership model for infrastructure building had taken off.
Among the power firms, the central public sector undertakings (PSUs) such as NTPC Ltd have been most aggressive in their capacity expansion plans.
While Central PSUs are planning to add 58% additional capacity, private companies such as Tata Power Co. Ltd and Reliance Energy Ltd accounted for 32% of the planned capacity addition. The state government-owned electricity boards accounted for only 16% of the capacity addition.