The Hindu Business Line : IVRCL Infrastructures forms holding cos for new projects

IVRCL Infrastructures & Projects Ltd, the Rs 1,054-crore infrastructure projects major, has embarked upon a business reorganisation programme with the help of the global consultancy company Deloitte.

IVRCL, currently specialising in water projects, has formed domain level holding companies IVRCL Desalination Ltd and IVRCL Road Toll Holdings Ltd.

These entities, in turn, would invest in the project companies, Chennai Water Desalination Ltd and Jalandhar Amritsar Tollways Ltd, respectively.

Addressing newspersons here on Tuesday, the IVRCL Vice-Chairman and Managing Director, Mr E. Sudhir Reddy, said the company plans to raise funds outside the country to fund these new ventures.

The mandating process will begin soon for the overseas offering of $140 million, divided equally among foreign currency convertible bonds (FCCBs) and global depository receipts (GDRs).

The global offering would take place during December or January, he said.

IVRCL has also chalked out business targets to be achieved by 2008. The company aims to attain a size of Rs 3,000 crore in terms of assets, turnover and market capitalisation and a workforce of 3,000 as against 2,000 employees now.

Currently, the company has an asset size of Rs 1,600 crore and a market capitalisation of Rs 1,800 crore, and expects to close the current fiscal with a turnover of around Rs 1,600 crore, Mr Reddy said.

IVRCL has an order book of over Rs 4,500 crore in the cash contracts segment, of which water projects account for 44 per cent, buildings 19 per cent, transportation 14 per cent and power projects 10 per cent.

Leveraging on its skills, the company has also entered the BOT (build, operate, transfer) /BOOT (build, own, operate, transfer) segment by winning three road projects and the country's first drinking water desalination project in Chennai in technical collaboration with the Spain-based Befesa, said Mr Sudhir Reddy.

At present, IVRCL has around Rs 1,600 crore of BOT/BOOT orders in the water and transportation sectors, he said. The company's subsidiary, IVRCL Prime Urban Developments Ltd, plans to get into the second phase of development of commercial space on a 12-acre plot at Gachibowli in the IT Corridor of Hyderabad.

It has appointed the South Africa-based architects Bentel to develop malls and multiplexes at a cost of around Rs 200 crore. Further, the subsidiary is also planning to foray into other cities such as Pune, Chennai and Bangalore.

To reduce its over-dependence on government contracts, IVRCL is evolving a strategy of changing its clients profile significantly to improve the share of private sector projects, Mr Reddy said.

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