Gulf Oil sees realty biz spinning money
Expects revenues from Hyderabad development flow in from this fiscal; plans to enter infrastructure space


New building
Gulf Oil has about 800 acres in Hyderabad in addition to properties in Bangalore, Delhi and Kolkata
It is developing a 100 acre knowledge park in Hyderabad with a total development of 12 million square feet
The company is also developing about 40 acres in Bangalore, including 10 acre commercial zone

K V Ramana.
Hyderabad

Gulf Oil Corporation, a Hinduja group company, which is sitting on a land bank of 2,000 acres across the country, expects property development to emerge as a major vertical from this year and fetch revenues on par with its existing segments.
The company operates in three key verticals - explosives, lubricants and consulting.
"Property development is going to be key vertical for the company and initial results should become visible in the fourth quarter of this financial year," Gulf Oil managing director Subhas Pramanik said. The company got into realty development two years back but the troubled property market delayed its plans.
Gulf Oil has about 800 acres in Hyderabad in addition to properties in Bangalore, Delhi and Kolkata. The company is developing a 100 acre knowledge park in Hyderabad with commercial, residential and research blocks in it. The total development planned is 12 million square feet.
"The consultants appointed for designing the project had submitted their report. Now, we are revalidating the whole issue. Initially, we were looking at IT sector, including hardware and software. Now, we would like to change our focus to specialty chemicals and pharma research, including life sciences. These sectors are expected to match the IT boom of early 2000," Pramanik said.
The company is also developing about 40 acres in Bangalore, including 10 acre commercial zone and an IT and ITeS special economic zone spread over 30 acres.
"These two projects are at an advanced stage. In fact, the Hyderabad project should start giving us some results in the last quarter of this financial year," he said. Though Pramanik refused to divulge the project cost, going by the market standards, the Hyderabad project alone would cost about Rs 5,000 crore. It is expected to become fully operational in 2014-15.
"Going forward, property development is going to be a key activity. The revenues from this activity should match some of our best performing verticals," he said.
For second quarter, the company had a total revenue of about 228.75 crore with a net profit of Rs 12.28 crore. While the explosives division brought in Rs 70.55 crore during the second quarter, the lubricants division contributed about Rs 106.69 crore. Consulting raked in about Rs 51.46 crore. The company takes up mining and infrastructure contracts under the consulting division.
Gulf Oil is also eyeing infrastructure space for the next phase of growth and would focus on roads, tunnels and bridges. "We have expertise in tunnelling and have been bidding for these projects. Now, we will start taking them up actively," he said.
The company claims an unmatched edge in explosives, including offering services such as implosion, and feels it would give in an upper hand in tunnelling projects.
The company has been working on a proposal to go in for a rights issue and a foreign convertible currency bond (FCCB) issue. While the rights issue would help in raising Rs 80 crore, the FCCBs would bring in about Rs 450 crore.
"By middle of December we should be offering the rights in the ratio of 1:3 (one share for every three shares held) for Rs 32. This issue is for meeting the working capital requirements. The FCCB, which would be taken up after the rights issue, would meet the project costs," Pramanik said.



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