State-owned construction firm NBCC (India) Ltd plans to acquire two public sector companies in the construction sector with a total investment of up to ₹500 crore, top executives of the company said.
The company is likely to finalize the deals in the second quarter of this fiscal year, Anoop Kumar Mittal, chairman and managing director of NBCC, told reporters at a media briefing. He declined to name the firms.
The plan to acquire these construction firms is line with NBCC’s strategy to consolidate its position in the market. Last year, NBCC completed the acquisition of Hindustan Steelworks Construction Ltd, an ailing public sector unit (PSU) which had long been struggling to repay debt to the government and banks.
“We have already taken over one public sector (firm) last year. We are moving towards mergers and acquisitions of other small PSUs so that NBCC could become a construction giant similar to what is there in the oil and gas sector. This is our objective and that is how the government is thinking,” said Yogesh J.P. Sharma, executive director (engg), NBCC.
Through these acquisitions, the company’s order book is likely to touch ₹1 trillion by the end of this fiscal, Mittal said. At the end of 2017-18, the order book stood at ₹80,000 crore.
The company is also working on developing four or five land parcels owned by sick PSUs as part of its plans to monetize non-core assets. Work on two of the parcels is likely to start by end of this year, Mittal said adding that the size of these land parcels range from 80 to 1,000 acres and that they would be developed into townships, middle-income homes or affordable housing projects.
Large government orders recently placed with the NBCC include the construction of around 15,000 bunkers in Jammu and Kashmir, development of a 40-acre piece of land owned by the Maharashtra government in Mumbai’s Wadala area and redevelopment of the Manora MLA Hostel in Nariman Point in Mumbai. Discussions to redevelop Dharavi, one of the largest slums in the world, are also underway.
“We are opening our operations in ten more countries, out of which nine are in the African continent and one in Middle East,” Mittal said. Outside of India, NBCC is currently present in the Maldives, Mauritius and Oman.
Source: Mint