Promit Mukherjee

Mumbai: Nashik-based Ashoka Buildcon Ltd (ABL), a road development company credited with having developed the first build-operate-transfer (BOT) road project in India, is looking for projects overseas.

The company is also planning to come up with an initial public offer (IPO) to partfinance its Rs1,500 crore order book.

Satish Parakh, managing director, ABL, said, “We are planning to venture overseas and have also visited certain locations, but nothing has been finalised yet.”

He refused to divulge further details citing “silent period” requirements on account of the IPO.

Parakh said ABL plans to hit the capital market very soon and would look at diluting close to 15% stake through the offer.

He did not disclose how much ABL was planning to raise through the offer. However, based on the size of its order book and the 75:25 debtequity ratio required to execute infrastructure projects, the amount to be raised is likely to be Rs225-300 crore.

The company currently operates 21 road or bridge-based BOT projects, of which 16 are in operation. Out of the remaining five, one is being developed by the company, three are being developed by subsidiaries of the company and one is being developed through an associate of ABL.

The company has three more divisions - engineering, procurement & construction (EPC), ready mix concrete (RMC) and toll collection.

Paresh C Mehta, vice-president - finance & accounts, ABL said the EPC division was the highest contributor of revenues to the total turnover, followed by its toll collection division.

The EPC division primarily engineers and designs, procures the raw material and equipment and constructs roads and bridges for the BOT division and third parties. It also maintains and repairs existing roads for the BOT division.

In addition, it also constructs commercial, industrial and institutional buildings for third parties. Parakh said ABL always had the first mover advantage among its competitors, whether it is BOT projects or introducing RMC in smaller cities.

“Though the company diversified into RMC for captive purposes, over a period of time,we have also started selling to third parties,” said Mehta. He said last year the company earned revenues of up to Rs48 crore from its RMC division.

According to Mehta, the company is also interested in forward integration and may diversify into real estate development and full scale urban infrastructure as and when a possible opportunity arises.

ABL clocked a turnover of Rs418 crore, of which the construction division contributed up to Rs245 crore. It expects to post a robust performance this year, too, said Parakh.

Source : DNA