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Business News/ Companies / News/  Dilip Buildcon to raise 2,000 cr via warrants, InvIT
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Dilip Buildcon to raise ₹2,000 cr via warrants, InvIT

Alpha and its other entities will pick up a 10% stake in Dilip Buildcon via warrants and a 26% stake in 18 road assets under the InvIT route

The fundraising is in line with the Dilip Buildcon's overall debt reduction plan that was laid down earlier. (REUTERS)Premium
The fundraising is in line with the Dilip Buildcon's overall debt reduction plan that was laid down earlier. (REUTERS)

Mumbai: Engineering procurement and construction (EPC) company Dilip Buildcon Ltd (DBL) is looking to raise up to 2,000 crore from Naresh Kothari-led alternative assets investor Alpha Alternatives Group through a combination of warrants and InvIT route over a period of 12-18 months, according to the company's second-quarter analyst presentation.

As part of the deal, Alpha and its other entities will pick up a 10% stake in Dilip Buildcon via warrants at 328.05 per warrant. This will translate into an infusion of 530 crore into the company via warrants. Separately Alpha will also pick up a 26% stake in 18 road assets under the InvIT route. The remaining 74% stake will be held by DBL.

Dilip Buildcon expects Alpha to bring in 700-800 crore worth of capital through warrants and InvIT during fiscal year 2024 and the remaining 1200-1300 crore in FY2025.

"DBL is getting 2000 crore capital and 4000 crore worth of invIT units which will translate into cash of 400 crore per year. Our idea is seeing the EPC business giving us regular business, taking the invested capital back into the company and setting up a long term revenue stream through our InvIT. As our EPC business keeps growing and PPP projects keep on increasing, we will keep adding more units to this one InvIT," said Rohan Suryavanshi, head of strategy, DBL during the analysts' call on Wednesday.

The fundraising is in line with Dilip Buildcon's overall debt reduction plan that was laid down earlier. It plans to be a zero-net debt company by fiscal year 2025.

"We have reduced 300 crore of debt from FY23 levels and our own target to reduce 800-1000 crore from FY23 to FY24 as stated earlier. That will take our net debt to 1300-1500 crore by end of this financial year. Our target is to make DBL a net debt free company by next financial year," said Suryavanshi. "We have taken a conservative approach going forward. We will focus on improving cash flows, reducing capex and monetising our assets," he added.

Dilip Buildcon’s order book stood at 23,988 crore at the end of June quarter, and this comprises roads and highways, mining, irrigation, water supply, tunnel projects, metro projects and special bridge projects.

Suryavanshi said the company is not looking to grow at a pace of 25% year-on-year. "The order book will grow commensurately to what revenue we want to do. We will look at having 10,000 crore of order every year," he added.

"Road sector is looking robust. Good investments are coming in for the companies and projects in this sector. Activity is happening on the ham and EPC. On the BOTs side not many awards are being given by NHAI off late," said Jagannarayan Padmanabhan, senior director - transport logistics and mobility, CRISIL

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Published: 08 Nov 2023, 06:31 PM IST
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