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Ambarish Mukherjee

Neemrana (Rajasthan) , March 10

INDIAN Infrastructure Equipment Ltd (IIEL), the equipment bank and end-to-end equipment rental company, plans to make an additional investment of Rs 150 crore during 2005-06 for purchasing assets and equipment.

"During 2005-06, we plan to make an investment of Rs 150 crore towards purchasing assets and expenses for our various hubs," Mr Sunil Kanoria, Chairman and Managing Director of IIEL, which operates under the brand name `Quipo,' told reporters here. He was talking on the sidelines of a conference to announce the company's new equipment hub spanning an area of 11,000 sq. m in Neemrana.

He said the additional investment would be funded partly by equity and debt. "At present, our debt-equity ratio is 1:1. Going forward, we have Rs 100 crore debt sanctioned in hand from various institutions such as IDFC and some banks, and this will be used up in the next six to seven months," he added.

IIEL started operations in March 2002 and it expects to clock revenues of Rs 50 crore in the current financial year ending on March 2005. It currently owns equipment worth Rs 160 crore for infrastructure development (roads, highways, bridges, ports, railways, urban infrastructure, mining, and oil and gas sectors). Its customers include L&T-ECC, IRCON, Punj Lloyd and Gammon India.

"The equipment rental market in India is still nascent. While the market for sale of construction equipment stands at Rs 7,000-8,000 crore and is witnessing a 25 per cent growth per annum, the rental market is close to Rs 200 crore," Mr Kanoria added.

Currently, SREI Infrastructure Finance Ltd holds a 23 per cent stake in the company. A 25 per cent stake is held by Mr Kanoria and family, and multilateral financial institutions hold more than 51 per cent of IIEL's equity. These include the International Finance Corporation (Washington), the Netherlands Development Finance Company ( owned by the Dutch Government) and Swedfund International AB ( owned by the Swedish Government).

Besides Neemrana, the company's existing equipment hubs are located in Gurgaon, Mumbai, Ahmedabad and Hyderabad. It now plans to open similar hubs in Nagpur, Guwahati, Chandigarh, Kolkata, Bangalore and Chennai.

Mr Kanoria, however, ruled out any immediate plans to take the company public. IIEL is mulling an entry into markets such as West Asia and Africa.

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