The Hindu Business Line : Gayatri Projects on diversification mode

Gayatri Projects Ltd (GPL), the Hyderabad-based infrastructure company, plans to tap into emerging business opportunities by diversifying into water, urban infrastructure, industrial construction, power generation and aviation sectors.

With an order book of Rs 3,600 crore, especially in roads, irrigation and industrial projects at the end of December 2007, GPL is keen to transform itself into an integrated infrastructure developer, said Mr K. Gangu Naidu, Vice-President-Finance. The idea is to create separate divisions for each of the new businesses and expand, he told Business Line.

Water biz

In the water business, the company has tied up with Ion Exchange. They will jointly bid for contracts for water and sewerage treatment plants and desalination plants.

Urban infrastructure is another new business division that GPL has forayed into. Building residential and commercial space is the priority. The company has brought down two of its cinema theatres in the heart of Hyderabad and is developing a multiplex with a commercial complex.

Tie-up with DLF

The promoters of GPL have also tied up with the real estate giant — DLF Group – to float a 50:50 joint venture realty company. They are in the process of acquiring around 1,000 acres, close to the Shamshabad international airport to develop an integrated township, Mr Naidu said. Interestingly, GPL also signed a memorandum of understanding (MoU) with DLF to forge a 50:50 joint venture and jointly implement large BOT projects between Rs 2,000 to 4,000 crore across the country recently.

Power plant

The company is actively exploring the possibility of setting up a greenfield power plant as part of its entry into the power sector. GPL has appointed Vimta Labs, Hyderabad for an environmental feasibility study. It is looking at Andhra Pradesh and Maharashtra with an objective of establishing about 1,300 MW capacity thermal power initially, Mr Naidu said.

In the aviation sector, the company had built the runway for the Calicut airport in the past. It plans to bid for project and is in the fray for the airport in Assam and is actively considering other locations. Industrial construction segment will also be consolidated in the near future, he added.

At present, GPL’s core strength is in road infrastructure with an order book of Rs 2,400 crore. It has created five special purpose vehicles (SPVs) to implement these projects on a build, operate and transfer (BOT) mode. Maytas Infra, Nagarjuna Construction Company, IDFC are part of the different SPVs, Mr Naidu said. All the five projects have achieved financial closure and are expected to be completed latest by September 2010. To optimise the advantages, the company is planning to hive off all the SPVs into a single-holding company. In future for BOT projects, it gives an opportunity to dilute stake in the holding company, he explained.

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