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State-owned construction firm NBCC plans to invest around ₹ 500 crore to acquire majority stake in two loss-making public sector firms, a top company official said.
“We are gradually moving towards consolidation in the construction business. As a part of the strategy, we acquired loss making HSCL. We will be completing the acquisition of two more PSUs by the second quarter of this fiscal,” company’s chairman-cum-managing director Anoop Kumar Mittal told reporters here today.
He added that the company will invest around ₹ 500 crore from internal accruals to acquire the other two loss-making firms.
Last year, the company acquired 51 per cent stake in Hindustan Steel Works Construction (HSCL), also a public sector company under the steel ministry, with an investment of ₹ 35.70 crore.
“Like HSCL, these two firms are also engaged in the construction business and therefore their acquisition will be strategic. Also, both these firms have a cumulative order book of around ₹ 15,000 crore. So with the acquisition, these orders will be a part of our order book,” Mittal added.
Currently, the company’s order book stands at around ₹ 80,000 crore and it hopes to add around ₹20,000 crore.
“With the addition of orders from HSCL, which was around ₹ 4,000 crore when we acquired it and the ₹ 15,000 crore orders from the new acquisitions, we will cross ₹ 1 trillion mark in order book this fiscal,” he said.
“We also hope our revenues will increase by 35 per cent to ₹ 10,000 crore this fiscal,” Mittal added.
The company is looking at expanding its presence in 10 new geographies, he said, adding, “currently we are present in three countries and we are planning to expand in 10 other countries. Nine out of these will be in Africa and one either in Dubai or Abu Dhabi.”
NBCC is also considering developing real estate projects on lands of sick public sector undertaking (PSU) or loss making PSUs or that available with the government, mainly on self revenue generation model
“We have quite a few land parcels and we are working on 4-5 of those. We plan to develop large townships, or mixed-used developments, or use it for creating affordable housing or high-end luxury residential with commercial space, among others. By the end of the calendar year, we will be finalising two projects with one in the NCR and the other either in Hyderabad or Kolkata,” Mittal said.
He said these land parcels are mostly around 80-100 acre, while a few are of 1,000 acres.
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