During most of its 54-year life as a government enterprise, National Buildings Construction Corp. Ltd (NBCC) stayed under the radar. Central ministries and state governments used its services to execute various engineering projects. When the Jawaharlal Nehru National Urban Renewal Mission was launched in 2005, it was named the project implementing agency, working quietly as an engineering, construction and procurement contractor.

NBCC picked up projects under government schemes like Pradhan Mantri Gram Sadak Yojana, besides solid waste management projects and developmental work in the north-eastern region. It went public in 2012, and on 23 June 2014, it was named India’s 15th Navratna enterprise, earning the freedom to take investment decisions up to 1,000 crore, and forge global tie-ups. How did NBCC make the transition?

Changing layout

It was in 1990 that the NBCC management decided to change course and turn more aggressive. The company added two business verticals—project management consultancy and real estate development. Anoop Kumar Mittal, chairman and managing director, said: “The project management consultancy was added to increase turnover quickly, while the real estate vertical was added citing better margins. There was no need to add resources for project management consultancy as we had the wealth of experience to seal the deals." These two verticals speeded up volume and profit growth, without adding debt.

Building blocks

The change in the business model gave the company the vigour to chase more projects without diluting profitability. As a project management consultant, NBCC started executing many landmark projects, leveraging its rich experience in sectors as diverse as roads, hospitals, institutions, offices, and residential and commercial buildings. The management also split its real estate development business into two. While the first division bought land from private and government agencies before developing and selling it, much like a private developer, the second redeveloped government colonies on a self-sustaining model, without government funding.

Going big

In 2012, NBCC went public and within two years, secured the coveted Navratna status. The company is now planning to tie up with at least six sick public sector units for the real estate development business. NBCC is also exploring joint ventures with companies in West Asia, Europe and the Commonwealth of Independent States. The company, under the ministry of urban development, has already signed a joint venture in Oman and is in advanced discussions with some companies in Turkey.

Mittal said the firm had an order book of 16,000 crore and revenue of 4,008 crore in 2013-14, with a net profit of 247 crore. “Our idea is to have 20,000 crore revenue and 2,000 crore net profit by 2020," he added.