The 7th anniversary brings you a list of remarkable developers in infra & real estate. BY TEAM CW
How do magazines celebrate an anniversary? Get a new logo and a new look, rework content to reach out to a wider and newer reader base, organise a fête or something akin to that...the possibilities are numerous. But we are doing no such thing.
With this issue, we welcome the 7th Anniversary of the magazine and in keeping stoutly with tradition, Construction Week decides to take stock. In this issue, we list out the most influential and established real estate and infrastructure companies that have made a mark in the sector. And not revenue-wise or mere scale and number of projects. The developers have displayed immense resilience in a market that has not treated them well last two years. We applaud that. Most of them are on the brink of selling assets and moving out of non-core business to raise money for future and better projects. And such determination is noteworthy.
So here goes our list and when you read through it, we hope you will understand why they made it to Hot 100.
With wide interests in infrastructure, power, ports, mining, logistics, and agriculture, the Adani Group rarely fails to make headlines. Adani Power remains committed to helping India on its path to attaining energy sufficiency. Two months ago, the company signed an MoU (memorandum of understanding) with the government of Chhattisgarh to develop two critical projects by investing more than Rs 25,000 crore. The projects will not only enhance the economic growth of the state but will also create substantial employment opportunities for the people of Chhattisgarh.
The giant power company has entered into an MoU for due diligence with the Welspun Group to buy two ready-to-build coal-fired power plants. The two plants, located in Uttar Pradesh and Madhya Pradesh, have all the necessary clearances and can generate about 4,000MW.
A feather in the cap for the company came when it entered into an agreement with the Indian Railways to supply 50MW electricity at Rs 3.69 per unit for three years. This is the first step in migration strategy of Railways to procure power directly from generators as ‘deemed licensee’ instead of discoms. Adani Power will supply power from its 4,620MW Mundra plant in Gujarat.
VICE CHAIRMAN & MANAGING DIRECTOR
The infrastructure arm of the billion-dollar Shapoorji Pallonji Group, Afcons Infrastructure has several firsts to its credit. It is the first Indian EPC contractor to install a process platform under float-over technology of the HRD Process Platform for ONGC. The company is also constructing the Rohtang Pass tunnel, the longest tunnel in the world at an altitude of 13,000-plus feet, besides designing and constructing an arch railway bridge over the Chenab river, by far one of the toughest bridge works undertaken by Afcons due to its geological and engineering considerations.
K Subrahmanian says, “For continued success in an international EPC environment, our philosophy of operational excellence is a must. It encompasses operational efficiency, productivity, innovation and commitment to delivery to all stakeholders.”
An oft repeated mantra of their execution strategy is simplification. The team is known to undertake an in-depth study of the design and methodology and work towards developing solutions that lead to simpler construction methods. Often, the company goes beyond its scope and proposes changes in design if it can lead to earlier delivery of projects.
For over three decades, Ahuja Constructions has been punctuating the Mumbai skyline with their buildings. Today, the Ahuja universe of projects can be classified into three categories – Star, Stella and Galaxy. Ahuja Star properties offer the highest level of luxury living. Properties in the Ahuja Stella category have been especially created to cater to the dreams and needs of the fast-growing aspirational segment; Ahuja Galaxy properties focus on community living, combining thoughtful amenities and best-in-class facilities in the concept of a modern township.
Considering that real estate generates second highest level of employment and contributes approximately 6% to the GDP, the company is keen that it achieves an industry status thus giving the sector a much-needed boost. This will entitle them to obtain funding from financial institutions, be recognised as a priority sector, especially by the Reserve Bank of India, and facilitate ‘single window clearance’ for projects.
The company plans to develop one million sq-ft year-on-year and wants to attain an enterprise value of $1 billion by 2017.
AKSHAYA PVT LTD
T CHITTY BABU
CHAIRMAN & CEO
When most people pay mere lip service to green buildings, Akshaya Pvt Ltd has decided to build only green buildings. Currently, the company has to its credit four Platinum-rated, six Gold, three Silver and two IGBC certified green buildings. It makes a conscious effort to not only minimise construction waste but also reuse construction waste on-site. Homes are designed to allow sunlight and cross ventilation, while making use of water efficient fittings.
Simultaneously, Akshaya has been working for progress of the real estate sector and perceives that changes can come only with the joint efforts of both the industry bodies and the government. Babu says, “It is essential that the government encourage developers to build low cost and affordable housing for the masses and review the existing FDI guidelines for investment and development in real estate to increase the flow of foreign capital into the sector. There is a need to streamline government policies and introduce reforms to boost the real estate sector.”
A vision the company has is to be a pan India leader through focus on service, quality, innovation and adoption of latest technology.
AL FARA'A GROUP
DIRECTOR, PAN INDIA MANAGEMENT
Although the Al Fara’a Group is well established in the Middle East for decades, it was in 2011 that Gangaramani decided to set up operations in India. Gangaramani says, “The Indian construction industry could look at following the footsteps of global companies in terms of a diversified approach in line with current business, emphasis on quality, safety at each and every stage, risk mitigation, and healthier management of finance.”
The Al Fara’a Group is happy to get recognition and is currently executing projects such as the Nagpur Metro, 400 railway stations in India, the Delhi Mumbai Industrial Corridor, EWS housing projects, the Nhava Sheva Trans-harbour link, and looks forward to be involved in the construction of 100 smart cities in India.
Realising the challenges faced by the industry, he says that the hazards are difficult to control in a constantly changing environment. “While safety can be implemented, other challenges are labour availability for projects, local interferences, cash crunch, and timely procurement of raw materials. Fluctuating prices of materials poses a big challenge. He cites his recent experiences of new projects that are clear indicators that the industry is poised for a bright future,” he adds.
AMAN SINGH GEHLOT
At a time when most developers are steering clear of developing commercial space, Ambience Group has constructed a corporate office tower in Gurgaon and is ready to rake in Rs 150 crore as annual rental income.
The group has a presence in Delhi and Gurgaon and is developing a 150-acre project, Ambience Island, in Gurgaon that comprises premium homes, Leela Ambience hotel with over 400 keys and a shopping mall spread across 1.8 million sq-ft.
Recently, it entered the Noida market where it plans to build 280 flats in the 3.5 acre project at an investment of Rs 465 crore. It is also planning Ambience City township in Panipat.
Gehlot says, “We are looking to list our commercial assets as a real estate investment trust (REIT). However, it is a concern for the sector that it has not yet been granted industry status. This hinders developers from acquiring single window clearance and takes forever to get all clearances in place. An industry status will boost sentiment and allow the sector to access capital and funds at cheaper rates.”
AMBUJA NEOTIA GROUP
Neotia’s ingress into the real estate industry was pure chance. The family was entering the cement business in Gujarat and Neotia knew it would be complicated to manage and was unwilling to relocate to Gujarat from Kolkata. He turned his attention to real estate. Today, the group has diversified interests in hospitality, healthcare, education, food & beverages, and infrastructure.
Recently, Ambuja Group announced its plan to set up seven luxury resorts across in the next five to seven years with investments in excess of Rs 350 crore. Neotia is optimistic that Kolkata is sure to emerge as a priority tourist destination and is preparing to pave the way. In another move, the company recently opened its 5th university in South-24 Parganas district.
On granting industry status to the real estate sector, Neotia says it would help in easier availability of funds. “The industry should work together to promote the cause and insist for desired policy changes. This will motivate companies to take up integrated township projects, while at the same time incentivise buyers by passing on the benefits of any cost reduction.”
Ansal API operates in a range of business verticals such as integrated townships, condominiums, group housing, malls, shopping complex, hotels, SEZs, IT parks and infrastructure, and utility services. The realty major was also one of the early companies to sign up technology majors IBM and Cisco for transforming its Sushant Golf City residential township into a smart city. Golf City has received permission to acquire a total of 6,500 acres to develop the township for a million people. The total investment in the project is estimated to be Rs 70,000 crore. Delhi-based Ansal API has developed over 260 million sq-ft of area so far. It is currently developing 18 integrated townships and has a land reserve of 9,731 acres, of which 7,250 acre has been acquired.
A few months ago, the real estate and infrastructure developer issued non-convertible debentures to provide foreign investors a platform to participate in India’s growing credit markets and struck gold when a Singapore-based foreign portfolio investor bought into it.
Going forward, the company plans to take its expertise to smaller towns thus taking the benefit of planned development to people living in those towns.
At a time when most infrastructure developers fight shy of getting involved in build-operate-transfer (BOT) projects, Ashoka Buildcon ventured into this and turned it into a success. Parakh says, “There’s a certain amount of risk in BOT projects. The higher the risk, the higher the rewards. Over the years we have made this our strength and developed a strategy to address the risks, analyse them, and ultimately gain profit from them.”
Although Ashoke Buildcon may not be in the big league, the company has been consistently bagging new projects. It’s a matter of pride for the company that it has a reputation of completing projects in record time. The current order book for the company including that of power, T&D and roads stand at Rs 3,100 crore.
However, for Parakh, delegation is a difficult skill to acquire. Every perfectionist would be dragged to the thought ‘if you want to do something right, do it yourself’. In today’s competitive world this will take you nowhere. It’s through the thoughtfulness of delegation that Ashoka Buildcon has built its management. Most directors, presidents, general managers in the company had joined as junior engineers and executives. “However, we took care to ensure that the right person gets the right job,” he adds.
BG SHIRKE GROUP
CHAIRMAN & MANAGING DIRECTOR
The BG Shirke Group has been in the field of execution of residential, commercial, industrial, infrastructural and special civil engineering projects like sports complex, airports etc. for over 60 years. The company has so far executed more than 200,000 dwelling units using ‘3S’ system, which includes speed, safety and strength, both in India and overseas. Currently, the group prefers to execute large housing, industrial and commercial projects on turnkey lumpsum basis by the use of proven prefabricated products and/or also by the conventional methods and materials.
Recently, the company diversified in infrastructure developments and completed two road projects on NH-4, part of a Golden Quadrilateral and one road project
It is also one of the few construction companies to to manufacture new building materials and construction equipment under one roof. The Concrete Equipment Division (CED), set up in 1988, manufactures automatic concrete weigh batching and mixing plants with transit mixers.
BHARTI LAND LTD
MD & CEO
It was only early this year that Bharti Land Ltd announced its foray into the premium residential segment starting with Delhi-National Capital Region (NCR). Hitherto, it mainly operated in the retail and commercial segments.
The development comes a few months after Sayal was appointed MD & CEO in August last year, to “conceptualise and implement a scalable business strategy and provide overall leadership to the business”.
Sayal says that he would also explore and seek new business opportunities via joint development models to scale the realty business to the next level of growth. “We currently have around 4 million sq-ft of commercial real estate development while another 8 million sq-ft of commercial and residential development is underway. We have recently entered into an agreement with Eros Group to develop a residential project in Faridabad, which will be a smart community project with a perfect blend of quality construction and technology.”
Bharti Land is also launching a marquee commercial project, Worldmark, which is located at Aerocity. The project will have 1.5 million sq-ft premium office and retail space.
CHAIRMAN & MANAGING DIRECTOR
According to the reports that emerge from real estate consultancy companies, the southern real estate market has always found demand - be it in residential or commercial. Hence, it’s not surprising to find a regular stream of new launches in the metro city of Bengaluru. A company at the forefront of new launches has been Brigade Group. The company has announced its intention to launch projects of 7.70 million sq-ft in FY15-16. Of these, 5.80 million sq-ft would come from residential projects, 1.60 million sq-ft from commercial and retail projects and 0.30 from hospitality projects across Bengaluru, Mysore, Chennai, Mangalore, Kochi and Ahmedabad. Late last month, the company said that its Brigade Meadows phase-I spread over 60 acres has been completed.
Over the last 29 years, the company has created many landmarks, Jaishankar regrets that Indian developers have been unable to be meticulous in material, resource and cost planning, which often leads to cost overruns. What is worse is that scope of works and specifications are not drawn up-front that would minimise or eliminate variances during project execution.
GURJEET SINGH JOHAR
An infrastructure company with diverse interests ranging from roads & highways to power to telecom transmission to water projects, C&C Constructions has ventured into most arenas of the country’s development. When the government made certain that the Dedicated Freight Corridor would materalise, C&C Constructions committed to pull out the bottlenecks along India’s growth path by working on the world-class railway project.
Last month, the company has bagged a $141.28 million contract from Engineering Projects (India), Oman, for road and civil works in the Sultanate of Oman.
The company has also begun construction work of the Shillong-Nongstoin-Tura road and has made good progress despite the land acquisition hurdle which is a common problem in Meghalaya due to its peculiar land tenure system. The work along the 264.30km Shillong-Nongstoin-Tura road at an estimated cost of Rs 1,494 crore started in early 2011 and the timeline to finish the project was March 2014, which has already been missed.
C&C is also executing the World Bank-funded road widening project on the Theog-Hatkoti stretch and has been offered a revised deadline stretching to June 2016 after the project ran into problems.
A new Gurgaon is fast rising along the Northern Peripheral Road, the widest expressway in the country with its parallel metro rail line, connecting Asia’s largest residential colony - Dwarka to the NH8. In the midst of this is the Chintels Metropolis, the land bank currently under development that includes 240 acres of luxury housing projects comprising the three prime sectors. “We estimate an investment of approximately Rs 5,000 crore in developing nearly 15 million sq-ft residential and commercial projects in the areas of Metropolis and Cosmopolis along Dwarka Expressway in both its Delhi and Gurgaon segments within the next 8-10 years,” says Solomon.
Taking a cue from established players, Chintels launched a subsidiary contracting company Chintels Infracon to enable efficient backward integration for on-time delivery of real estate projects. It will manufacture CLC blocks for ongoing projects but may gradually diversify into electrical, interiors, metal and glazing products.
The company also has tie-ups with partners like Sobha Limited and ATS who are known for their quality construction.
City Corporation is well-known for Amanora Park Town, a 400-acre township in Pune. And Deshpande says proudly that Amanora qualifies as the first township as per the guidelines of the government of Maharashtra. It involves the developer creating and maintaining the entire infrastructure of the township.
Over the next year, the developer plans to launch over 20 lakh sq-ft in the affordable category. However, he adds, “The biggest challenge today is the clearances from the government, which takes a couple of years for large township projects. The RBI has put constraints on real estate finance like ceiling on construction finance as well as customer finance. And while it has relented on housing loans, the government single-window clearance remains elusive.”
Deshpande would prefer the ‘Swiss challenge’ method of bidding for infrastructure projects. Under this, third parties are allowed to make better offers (challenges) for a project during a designated period while the original bidder is given the right of first refusal and the right to counter-match any superior offers given by a third party.
Bansal rues that the Indian construction industry is yet to come at par with global companies. Citing the example of the Burj Khalifa, he adds that construction of the building started in 2004 and the building was opened in 2010. “Within six years, the developers were able to construct the tallest building in the world,” he says.
DB Realty has several projects coming up in Mumbai, but the ones they are focusing on are DB Skypark near the Mumbai International Airport (the first residential project in the vicinity), DB Turf View, Project Bandra and DB Orchid Heights. “A key challenge faced is getting approvals. Obtaining the IOD and CC for buildings is a long drawn out process, extended only by the fact that CC is only applicable for a specific number of floors. Once that floor is complete, developers are thrown back into the approval process, effectively causing delays in completion,” he adds. Additionally, there are always some changes in rules. “We are currently in a regulatory limbo as rules and regulations are changing over short periods of time. It is for the betterment in the long run but in the here and now, it becomes difficult to ascertain any substantial changes coming your way,” he adds.
At a time when Make in India campaign is being much talked about, Suryavanshi believes that it can be a success in the long term only when Indian companies will focus on innovation and sustainability. He is keen that Indian companies take a cue from global counterparts and focus on safety too. For him, an issue that causes delay and arbitration but hardly gets enough mention is issuance of inaccurate Detailed Project Reports (DPR) before tendering — a consequence of being designed by incompetent consultants. “The bidding process is archaic and should be overhauled. The government shouldn’t build public infrastructure using lowest bidder criteria alone. It should look at those who can build best quality infrastructure using a points system that evaluates track record of the company, history of timely completion, plant & equipment capabilities, availability of skilled labour, etc.”
Secondly, he adds, the government should make all the necessary clearances available for the developer at the start of the project. Also qualification criteria should be tweaked for players with expertise in one infrastructure asset class (eg, bridges) to be able to bid for another asset class (eg, canals) even if they do not have prior experience in that specific asset class.
KUSHAL PAL SINGH
After raising Rs 2,000 crore by selling stakes in two projects, India’s largest realtor DLF is planning to monetise some more housing projects through private equity as property sales continue to remain subdued. The company is looking at monetising select residential projects through private equity till the real estate market improves. In another move, the company has appointed JP Morgan and Morgan Stanley as merchant bankers for proposed sale of promoters’ 40% stake in the company’s rental arm DLF Cyber City Developers to institutional investors.
It is also expanding its portfolio to develop four million sq-ft of office space in two information technology-focused projects in Chennai. The first will see the company expand its DLF IT Special Economic Zone (SEZ) in Manapakkam, about 8km from Chennai airport. In the second project, it will build a SEZ for IT and ITeS at Taramani, the city’s IT hub. The proposed investment in these projects would be about Rs 2,000 crore and Rs 2,500 crore respectively. The company is banking on the state government to give all clearances through a single window clearance system.
VICE CHAIRMAN & MANAGING DIRECTOR
Affordable housing might be seen by builders as a stop-gap to tide over the presently sluggish real estate scenario. It could be that they are biding time with various offerings till the market picks up and they can focus once more on ultra-high-end offerings. However, India’s growth story will see the need for focused development of more offerings in the mid-range, and low-income group housing, for quite some time to come, if it is to meet the government-backed goals of ‘Housing for all by 2020’. And Goradia cannot stress on this enough.
In keeping with this policy, the company launched Planet North, an affordable luxurious integrated township project spread across 25 acres at Shil-Thane. Goradia says that the launch of this project will benefit the mid segment of home buyers bringing them closer to experiencing luxurious living in Mumbai.
Dosti Realty has also entered into an agreement with Indian Hume Pipe Company to develop nearly 3.5 acre land parcel in Mumbai. The total land parcel includes 2.08 acre freehold land, while 1.39 acre is under slum rehabilitation scheme.
DS KULKARNI DEVELOPERS
CHAIRMAN & MANAGING DIRECTOR
“The strength of character, integrity, hard work, modesty have always painted the picture of a perfect human being before me. There is nothing like these intrinsic values that have inspired me more. It is what I have come to worship as fellow being, is a oft repeated theme for this construction magnate based out of Pune.
While the developers myriad projects dot the Pune skyline, it was his announcement to launch DSK Dream City, a township project under the Maharashtra Special Township Act at Loni on the Pune-Solapur highway with an investment of Rs 8,000 crore that surprised many. The project will have an IT park on 20 lakh sq-ft, a seven-star hotel, 15 academies for sports, 26 cricket pitches, 14 gardens, including a botanical garden, and a total of 250 amenities. A larger project the company is developing is Nanded City, a 700 acre township situated on the Pune-Sinhagad Road.
However, the crunch of the current fiscal situation seems to have hit him too. A few months ago he came out with a public issue aggregating to a total of Rs 200 crore and use the issue proceeds for some of the projects under development.
CHAIRMAN & MANAGING DIRECTOR
For a few years last decade, Gammon India had found a knack of winning most of the projects put out to tender. Those were the days when issuing closed tenders was the norm and few were invited to bid. With competition, more concessionaires have entered the infrastructure sector and they have been firm in demanding transparency in the bidding process. The privilege that Gammon India enjoyed seems to have come to an end.
Considering its expertise in roads and highways, the company now strongly contends with varied players. In September, Gammon India bagged a sizeable order worth Rs 1,710 crore from NHAI for four-laning of Udhampur to Ramban section of NH-1A in Jammu & Kashmir under phase-II. At the same time, it also won a Rs 397 crore road project from the Goa government.
The firm has reporting been losses in the past couple of quarters on poor sales and higher finance cost. According to reports, the beleaguered infra company has sold its stake in nine projects valued at Rs 6,750 crore to Brookfield and Core Infra India Fund, a deal that will fetch Rs 563 crore as well as reduce its debt by Rs 1,718 crore. Of the nine projects in which Gammon Infrastructure Projects sold its stake, six are road projects and remaining three are of power.
TV SANDEEP KUMAR REDDY
With an order book swelling to over Rs 10,000 crore, Gayatri Projects is on a roll. In a major boost to its road project operations, the Hyderabad-based infrastructure company has bagged multiple orders worth Rs 3,318 crore from the NHAI under the EPC mode.
Similarly, Gayatri Infra Ventures Limited, the asset development arm of the company and its other entities are currently working on seven operating and one under construction road projects, adding up to gross capital employed in excess of Rs 5,000 crore. The energy subsidiary, Gayatri Energy Ventures is in the final stages of developing a 2,640MW power project in partnership with SembCorp Industries, Singapore.
Speaking about delays in infrastructure projects, Reddy says, “Highway developers had expected traffic to grow by at least 8% every year, but many operational toll-based projects are seeing a big mismatch in traffic estimates from the time the projects were awarded and actual traffic on ground today, which has remained muted, hurting the ability of the developers to service debt,” he says.
For Gera, in the current challenging environment of sluggish sales, there has been a huge spike in approval related issues as well as extortion from blackmailers who use the RTI process to obtain a file and then raise frivolous issues with the officials to delay the project and extort huge sums of money. For him, the health of the real estate sector reflects the health of the economy at large. “The lack of timely regulatory approvals, false stop notices, complex financing processes are factors obstructing the sector to transition to a level of maturity. Although the new regulatory bills are being formulated keeping in mind their success in other industries, the Real Estate Draft bills and acts are still pending approval,” he says.
The realty player is eyeing 50% increase in sales over the next two years to more than Rs 650 crore, even as it plans to add another one million sq-ft of development over the period.
The company currently has a portfolio of 6.28 million sq-ft of projects including commercial and residential across three markets — Pune, Bengaluru and Goa. It expects to clock around Rs 400 crore this fiscal.
With 15 power generation assets of which eight are operational and seven are under various stages of development, six operational highways covering a total length of 2,851 lane kilometre, a multi-product 4,300-acre Special Investment Region in Tamil Nadu, developer of two major airports in India, GMR Group has come a long way.
Last month, the Group announced that its subsidiary Kakinada SEZ has signed an agreement with Japan’s JGC Corporation (JGC) for co-developing Japanese-oriented Food Processing Park at its Kakinada SEZ.
In a global deal, GMR Megawide Cebu Airport Corp (GMCAC), a joint venture between GMR Infrastructure and Megawide Construction Corp of Philippines, recently broke ground for the construction of Mactan-Cebu International Airport (MCIA) Terminal 2, which is expected to be complete by 2018.
Recently, two of its gas-based plants, with capacity of 1,138MW, in Andhra Pradesh were awarded allocation of gas which allows it to operate over the next six months. As someone who has launched 28 different businesses over the years, Rao has build assets worth $5 billion from a mere $11 million in 1999.
MANAGING DIRECTOR & CEO
In a bid to unlock capital invested in their commercial portfolio and hasten the pace of growth going forward, Godrej Properties sold 4.35 lakh sq-ft commercial space at its Bandra-Kurla Complex for Rs 1,480 crore. The funds received through the deal will be utilised to repay debt and support future growth opportunities.
“Currently, both the real estate and infrastructure sectors are facing challenges like high cost of land, unskilled manpower, lack of infrastructure and a cumbersome approval process, to name a few. Real estate in India is a massive opportunity even if we simply consider the employment it generates and the urbanisation expected over the next few years,” says Godrej.
He adds that at several instances has each sector made representation to the government to accord it an industry status. “We would be happy to see greater transparency and accountability come in — both on part of the businesses and statutory authorities,” he adds.
Over the next few months, the company plans to launch new projects in Mumbai, Bengaluru and NCR. “We will also launch new phases of our existing projects in Ahmedabad, Nagpur, Pune and Chennai,” says Godrej.
DR GVK REDDY
FOUNDER CHAIRMAN & MANAGING DIRECTOR
A leading Indian conglomerate with wide interests in energy, airports, infrastructure, transportation and hospitality, GVK has several firsts to its credit. After setting up India’s first independent power plant in Andhra Pradesh, GVK expanded itself to a slew of CCPP - Combined Cycle Power Plant (gas/naphtha based), thermal (coal based) and hydro power projects across the country. The company made its foray into the aviation sector when it bagged the mandate to operate, manage and develop GVK Chhatrapati Shivaji International Airport (GVK CSIA) in Mumbai. In transportation, the group has four road projects under its transportation vertical, totalling to 2,816 lane kilometre. In hospitality, GVK has premium hotel projects in Hyderabad, Chandigarh and Chennai with a total key base of 1,093, and has plans to set up hotels in Mumbai and Bengaluru. Last year, the group acquired the Australian coal mines in Queensland with eight billion tonne reserves and a capacity of more than 80 million tonne per annum for $1.26 billion. It will also set up a 500km rail line and a 60mtpa port as part of the ‘pit-to-port’ logistics solution.
PRESIDENT & CEO
Consider some of the circumstances under which home-grown infrastructure giant, Hindustan Construction Company (HCC), has helped in nation building. Setting up hydroelectric projects 11,000 feet above sea level, working in places where temperatures dip to -40o Celsius not to forget low oxygen levels, surveying at high altitude terrains and traversing roads with hairpin bends with scarce human habitation, and carrying work materials to sites that have a six month cut-off period due to heavy snowfall and or besides being hostile areas. These and some more are just a few of the conditions under which HCC has created engineering marvels where nothing stood earlier.
Karambelkar says, “Our projects are highly complex. Moreover, considering that majority of core infrastructure projects are built in remote locations, it makes it that much harder to implement them.”
The company has built hydro-electric power projects, created long tunnels in remote locations, India’s highest altitude dam, over 65% of the installed nuclear power capacity of India, and the country’s largest and first light water reactors.
VICE-CHAIRMAN & MANAGING DIRECTOR
Last month, Housing Development and Infrastructure Ltd (HDIL) announced plans to invest Rs 150 crore for the first phase of its affordable housing project in far off suburban Mumbai. It is also launching two luxurious projects in another part of the city. With a land reserve of 243.99 million sq-ft, HDIL has developed over 100 million sq-ft of commercial, residential and retail space.
Currently, 43 million sq-ft sale area of projects are under construction, with 23 ongoing projects. Of this, residential portfolio is 31.15 million sq-ft.
“The real estate sector is heavily regulated by various governments. Developers are required to comply with numerous laws and regulations, including policies and procedures established and implemented by local authorities in relation to land acquisition, transfer of property, registration and use of land. The time frame of implementation of the new liberal policies is not clear. There is a significant delay in getting approvals for projects,” says Hariprakash Pandey, senior VP, finance, HDIL. The company is eager that this sector be granted industry status to improve funding chances, bring in transparency and enhance consumer confidence in buying property. It will also help stabilise home prices.
CHAIRMAN & MANAGING DIRECTOR
One of the most familiar faces in the industry, Niranjan Hiranandani has never shied when making an opinion or building landmarks across the country. At the Construction Week India Awards in September, he had expressed that measures taken by the central and Maharashtra government in terms of ease of doing business have not percolated to the ground level and that developers continue to face various issues such as delay in clearances.
“Very often, builders face numerous challenges like delay in approvals and clearances thus leading to cost escalation. For long, the industry has been demanding single window clearance system. The government is taking steps towards this, but they are not being implemented effectively,” he added.
In terms of projects, the developer has commenced work on an office tower Hiranandani Signature at an investment of Rs 180 crore. The Group also unveiled its luxurious private apartment’s project, One Hiranandani Park, located in Thane’s Ghodbunder road. Hiranandani is also considering tourism-related real estate development in Maharashtra.
IL&FS ENGINEERING & CONSTRUCTION
MANAGING DIRECTOR & CEO
After more than two decades of demonstrating its capabilities in sectors such as roads/expressways/highways, buildings, dams, and power projects, the company has initiated forays into new business segments such as airports, seaports, rail and rail-based systems, oil and gas pipelines, refineries and water treatment. Khattar believes that the infrastructure sector needs to sell its ideas more forcefully in terms of doing projects the way it should be executed. “Infrastructure companies constantly avail of global technologies but find it hard to implement them in India. A reciprocal approach from the authorities for discharging corresponding deliverables and approvals is often lacking. A pro-active mindset can help in overcoming some of the challenges we face for completion of projects,” says Khattar.
However, what has come as a relief is the swell in order books as more projects are announced. But challenges at the operation levels continue with delays in order execution and the resulting impact on operating costs and interest payouts.
CHAIRMAN & MANAGING DIRECTOR
As of last month, IRB’s construction order book stands at about Rs 9,650 crore, which will be executed over the next three to four years. The infrastructure developer is upbeat on orders visibility from the National Highways Authority of India (NHAI) and aims to bag road projects for another 200-300km by March under the ‘build-own-operate’ (BOT) model. Last month, private companies announced new projects worth about Rs 225,000 crore in the July-September period, 54% more from a year earlier, in what could boost economic activity in the coming months. “New projects announced under the PPP model have received good respond from developers. These projects are seeing capital commitment from the private sector which is feeling more confident than before,” said Mhaiskar.
Recently, the company announced its decision to set up an infrastructure investment trust by March next year to sell or transfer stake in SPVs to facilitate generation of funds. Thus, the role of IRB will be to adopt ‘BEST’ policy which means IRB will ‘bid’ for the project, ‘execute’ the same, ‘stabilise’ it and then ‘transfer’ the same to the trust.
E SUDHIR REDDY
CHAIRMAN & MANAGING DIRECTOR
Most infrastructure companies are diversifying their portfolio and gaining expertise in various sectors to keep with market demand and spruce up bottom line. And IVRCL is no different. The company, which started with water projects, has gained a foothold in new areas such as buildings and industrial structures, power transmisison and transportation. “Water is close to my heart, more so as I belong to an agriculture family. Water projects are our contribution to betterment of India. I am very happy about our desalination plant in Chennai, the first of its kind in Asia,” so Reddy has said.
Over the last few years, it has also made its mark overseas. In one its biggest projects overseas, the company has bagged an EPC project valued at Rs 3,624 crore from the ministry of interior, Saudi Arabia. The scope of work includes constructing pre-fabricated residential complexes and includes designing/building mass housing in three locations. The project is to be completed in about 36 months.
The company is not immune to current market conditions. It has been reported that the company is close to raising around Rs.1,000 crore by selling some of its assets.
JKUMAR INFRA PROJECTS
In infrastructure circles, Gupta is a man of his word. Known to complete every project he has bagged, in spite of insurmountable circumstances, he is also reputed to help clear hurdles during execution. It would not be far from the truth to say that of the 10 flyovers constructed in Mumbai alone, half of those would be by JKumar.
Last month, the company announced that its joint venture firm has bagged two orders worth Rs 1,134 crore from JNPT Port Road Company. At the same time, a work order of Rs 539 crore was issued by NHAI for redevelopment of the Karal Phata bridge.
A feather in its cap was when it emerged lowest bidder for construction of viaducts of the Rs 10,700 crore Ahmedabad Metrorail project. The company is already working on metro projects in Delhi and Navi Mumbai. Over the years, JKumar Infra has improved its chances of bagging prestigious projects across the country. This is a far cry from the times when all Gupta wanted was to maintain PWD buildings and consider construction of small projects and pipelines.
EXECUTIVE CHAIRMAN & CEO
The Jaypee Group is better known for its Yamuna Expressway project, a 165km access controlled six-lane super expressway along the Yamuna river connecting Noida and Agra on BOT basis. It is also working on some prestigious projects such as the Sardar Sarovar (Narmada) project, 900MW Baglihar Hydroelectric Project in J&K, and the 990MW Punatsangchhu II Hydroelectric Project in Bhutan.
Besides this, the company also has several interests ranging from cement, power, real estate, fertiliser, hospitality and healthcare.
However, the current market conditions have taken a toll on the company’s finances. It is in talks with a prominent company to sell its entire 20-22 million tonne cement portfolio in a bid to significantly improve its financial health. The group is among the top five cement players nationwide even after divesting around 9 million tonnes of capacity to peers like UltraTech, Shree and Dalmia Bharat for over Rs 7,000 crore.
Its board of directors has also approved the proposal to divest its wind power plants in Maharashtra and Gujarat on slump sale basis. The plants have an aggregate of 49MW.
Bhagtani has a new theory on what he has learned from global companies. “Real estate companies must consider third party involvement, adapting new age technologies by creating a lifestyle and not just a home, and spend less time in acquiring approvals from authorities and ensure transparency,” he says. He is aware that the third party involvement might not go down well with the fraternity.
His pet peeve is the rules for bidding for a project. “The basic structure consists of the formulation of detailed plan, specifications of the facility based on the objectives and requirements of the owner, and invitation of qualified contractors. For a transparent and competitive environment, the government has been relying on standardising documents/processes for PPP projects. The process of selection should enable the selection of competent experts,” he says.
He is eager that authorities do away with the many layered taxes to achieve a dream of Housing for All by 2020. But he is optimistic that the new RBI policy to reduce the minimum risk weightage on individual housing loans for low cost homes will revive sales apart from lending support to Housing for All scheme.
K RAHEJA CORP
MANAGING DIRECTOR, REAL ESTATE DEVELOPMENT
At a time when most developers are grouching about limited land parcels available, K Raheja Corp has been busy making bids for exclusive land. If word in the market is to be believed, K Raheja Corp is in the fray to buy a 30-acre land parcel along the Thane-Belapur road near Mumbai. And while the land is suitable for an information technology park, the bids that have been submitted are in the range of Rs 200-210 crore. A few months ago, a reputed international bank sold its prime land parcel in Mumbai to K Raheja for Rs 230 crore.
The group has several projects on the anvil which are in the process of closure. In the meantime, it is completing sections of its six large to medium projects. Bhatija says, “In India, investment in the sector has largely been private and due to limited cross border fund flows, there is an increased burden on private players. The challenges are high cost of finance, lengthy approval processes, high transaction cost, reduced availability of liquidity and a more congenial environment for the inflow of FDI.” There is also a need to fast track creation of REITS and Real Estate funds and a market created to improve the liquidity in the system through investment by retail investors/public.
Several parts of the city of Mumbai are dotted with Kalpataru project. Having created successful townships, commercial and residential complexes in and around Mumbai and Pune, the group is now largely focusing on the super-premium luxury segment. “The focus has been to partner with best-in class professionals to create masterpieces in strategic locations, keeping in mind the aspirations of the new generation,” says Munot.
He is keen that Indian firms learn from organised markets and work towards more stable seamless processes. “There is immense scope for improvement in the Indian real estate sector considering the breakdown of the product lifecycle. Global firms have been extremely instrumental in bringing new technical capabilities, improving efficiencies, enhancing quality and providing funds in real estate development,” he adds.
“Following proactive ideologies would help influence Indian players to be visionaries and redefine the scenario. Several prominent private equity investors have ventured in Indian real estate since the sector was opened for global investors. Encouraging global participation will continue to open new frontiers bringing in opportunities and learnings,” he says.
RASESH B KANAKIA
With its vast portfolio of residential buildings, the Kanakia Group is a well-established name in the real estate domain. Kanakia’s vision also encourage him to venture into entertainment, education and the hospitality sector.
“Our focus in the coming years will be on developing hotel and residential properties. We plan to invest more than Rs 500 crore over the next two years, which will be utilised for buying land parcel and construction,” says Kanakia. With a portfolio of over 13 million sq-ft across categories including residential, commercial and hospitality, the company currently has 13 lakh sq-ft of area under development in the residential space and 15 lakh sq-ft in the commercial segment.
Recently, the group entered into an agreement to infuse more than Rs 200 crore in a 700,000 sq-ft project in Mumbai. The amount will be used to repay debt raised for the project. Kanakia will replace the majority stake owner and lead the consortium with other three partners.
A few months ago, it unveiled its four storey-tall Eiffel Tower at BKC Kanakia Spaces, an artistic creation that will be part of the upcoming Kanakia Paris. The 40-feet tower is expected to become a landmark within BKC.
KEC INTERNATIONAL LTD
MANAGING DIRECTOR & CEO
A strong player in the transmission & distribution business, KEC International has been making strides in bagging large orders. Last month, the company won new orders worth Rs 668 crore in its T&D, cables and solar businesses. It is also executing several international orders in the transmission space. It secured a Rs 253 crore order from Zambia and orders worth Rs 222 crore from its wholly owned US subsidiary SAE Towers Holdings Llc.
Elaborating on challenges, Kejriwal says, “Right of way and land acquisition are challenges encountered by transmission line construction companies which result in cost/time overruns. Then there are project challenges of constructing lines in difficult climatic conditions and hostile terrain.” Remedies like plug-and-play model of awarding projects where approvals are taken in advance or creation of a SPV which will seek all approvals are some ways in which we can resolve the RoW and land acquisition issues. It has four projects under execution at five locations in J&K. Extreme weather conditions, high altitude and difficult logistics arrangements are some issues. However, it is executing the projects with modern construction techniques.
KK GUPTA CONSTRUCTIONS
KK Gupta Constructions, a fledgling company, has developed infrastucture projects catering from design to procurement to construction and maintenance. But Gupta moans that infrastructure companies continue to be beleaguered by challenges, especially during completion. “Some are old problems that continue till date and many of these challenges are a result of shortage of payments, legal, regulations, and environment,” he says.
Considering that the construction industry is regarded as schedule-driven industry, achieving project completion within duration is necessary for the success of the project. It is the changing nature of the work that is a cause of concern. He is also surprised that even after contracts have been drawn up on a particular project after having bid successfully for it, there are changes made.
The company has also aligned itself with new investors and is looking forward to grow its infrastructure business in Rajasthan, Gujarat, and Madhya Pradesh. The infusion of new capital into the business will also allow the company to look at new avenues of growth and consider the mining projects after the government opened up the sector again.
CHAIRMAN & MANAGING DIRECTOR
In Pune’s rapidly expanding real estate industry, Rajesh Patil is regarded as a bit of an oddity. He has a reputation of being a maverick, and instead prefers listening to influential voices from outside the industry. They simply couldn’t relate to his world view. But when most developers are reeling under dismal sales, Kolte Patil has marched ahead.
Early this year, the company announced its plans to invest Rs 3,000-3,500 crore in 13 new projects in the city. It will develop over 6-8 million sq-ft area in the next three years. With these 13 projects the company will create a supply of over 6,000 homes between FY15- FY17. It has a total land bank of 50 million sq-ft in and around Pune.
The company, which also has a presence in Bengaluru, entered the Mumbai market with two society redevelopment projects. Its aim was simple: Margin expansion. The aim for the next three years is to double revenue to Rs 1,500 crore.
Last month, the developers bought out its partners in its SPV company Corolla Realty by shelling out Rs 164 crore (approximately $25 million), according to a stock market disclosure. It also raised Rs 110 crore through issue of redeemable non-convertible debentures. And to top that, it plans to re-enter commercial property development next year after a long gap of eight years.
LALIT KUMAR JAIN
CHAIRMAN & MANAGING DIRECTOR
With 6,004 units under construction in Mumbai and Pune, Kumar Builders (KUL) is one of the oldest real estate company headquartered in Pune. Jain, nicknamed the green man of Pune, and past chairman of Credai, has preferred to build integrated townships that are affordable to the middle class, are modern, self sufficient and fully equipped.
Kumar Builders’ recently launched 103-acre Kul Nation at Manjri, Kumar Properties, a township.
Considering the spate of projects under construction, the developer has raised Rs 280 crore from Xander Advisors India. The money will partly refinance existing debt and partly for projects.
The government’s plans for developing 100 smart cities over the next five years seems to be heading for reality. While the task seems ominous, at a micro-level, KUL wants to be ahead of the curve, who has also developed projects along ‘smart’ lines over the last few years. “The increasing adoption of global best practices and latest technologies in the building construction sector has by and large been embraced by the real estate community for some years now,” says Jain.
It is no surprise that L&T Realty a 100% subsidiary of the $14 billion Larsen & Toubro, has followed fast in the illustrious footsteps of its parent organisation in a span of just three years after establishment. The company made a successful foray into residential complexes in 2012, when it sold 400 apartments in Parel, Mumbai, within four days of the launch. Joshi says, “The challenges remain common to all. The multiplicity of approvals and their timelines are definitely a challenge. As a business, we ensure that we start projects only after all approvals are received. We are also selective in choosing partners with similar values and capabilities.”
In a strategy to exit non-core business, the company is in talks with three entities to sell more than one million square feet of retail space at Seawoods in Navi Mumbai. The company is eyeing close to Rs 1,500 crore from this transaction. It is also planning to monetise its 67-acre land parcel in Bengaluru by developing a residential township. In the first phase, the company will develop 3,200 highend apartments.
LARSEN & TOUBRO
DEPUTY MANAGING DIRECTOR & PRESIDENT
India’s largest technology, engineering, construction, manufacturing and financial services company with revenues of over $15 billion has elevated Subrahmanyan to deputy MD & president last month. Prior to this, Subrahmanyan, a member of the board, was senior executive VP, infrastructure and construction and headed L&T Construction. In his three decades at L&T, he has driven many large projects, including airports in India and metro systems in Qatar and Saudi Arabia. The company will continue to monetise its non-core assets and will keep unlocking value by listing subsidiaries that are unrelated to its core infrastructure business. With this in mind, the E&C company has formed a new unit, Smart World and Communication, to cater to smart cities, security solutions and communication projects, expecting the business to grow to $1 billion in 3-4 years.
Last month alone, the company said its construction arm has won contracts worth Rs 1,376 core in power T&D business. In the domestic market, the solar business has bagged multiple orders, which upon completion would take the total installed capacity of solar plants by the company to 643 MWp, one of the highest executed by an Indian EPC company.
The Lodha Group has developed some magnificient buildings and continue to awe with announcements that are much more grandiose. In September, it announced The Luxury Collection, a new umbrella brand that aims to be the world’s finest, first-of-its-kind, international end-to-end luxury portfolio. With its headquarters in London, The Luxury Collection will be curated out of the luxury capital and will offer rare and exquisite residences artfully created with the highest level of design, workmanship, and service.
At a time when property firms are struggling to meet sales targets, the company clocked gross residential sales of Rs 7,800 crore last fiscal. “We are looking to do about Rs 9,000 crore of new sales this year. We also intend to deliver a little over 6,000 homes this year,” he says.
The company’s diversified portfolio is concentrated in a handful of large projects. Its four largest projects are Palava City in Dombivali, the Park in Worli (including Trump Tower), New Cuffe Parade in Wadala and World Towers in Upper Worli. Palava, which is under way, alone is spread across 4,500 acres and already has 12,000 people living in it. It has one ongoing project each in Hyderabad and Pune and plans to enter Bengaluru some time down the line.
N NAGESWAR RAO
It’s a good thing that foreign institutional investors (FIIs) continue to show an interest in India’s still-growing infrastructure sector, even as Indian companies are staggering under debt and prolonged projects execution. And while some developers aren’t in too much distress, some are clearly cashing out.
In keeping with this trend, Hyderabad-based infra player Madhucon Projects has sold its 100% stake in Madhucon Agra-Jaipur Expressways Ltd (MAJEL), an operating toll road, to Singapore-based Cube Highways and Infrastructure for Rs 248 crore. The company won the 25-year contract for the project from NHAI to widen the two-lane road into a four-lane highway on BOT basis. The transaction allows the group to monetise its well-established asset to meet its liquidity needs and adds to the growing list of high quality road assets in Cube Highway’s portfolio.
With an order book is about Rs 6,400 crore, the company is a major player in roads & highways irrigation, power, mining, and tunnelling. It recently commissioned the second unit of the phase II expansion of its Simhapuri thermal power project in Andhra Pradesh. It’s also one of the few companies to have reported a net profit of Rs 8.59 crore for the Q1 2015, an increase of 32% over the corresponding quarter last year.
CEO, REAL ESTATE
Since taking over as CEO in 2009, Arjundas has been established the Group’s focus on sustainable urbanisation. last year, the company announced two projects in Mumbai and Chennai under ‘Happinest’. “The business model rests on “low margin-high volume with quick turnaround” principle which if achieved can offer returns on capital that is higher than the conventional real estate developments,” she said in an earlier interview to Construction Week. Having met with success in its first phase, the company has announced phase II.
In June, the company announced it expansion into Bengaluru’s housing property market with its maiden project, Windchimes. The company is investing Rs 450 crore on development of a property spread over 5.8 acres near Indian Institute of Management.
A couple of months ago, the company signed a pact to set up an industrial park in Chennai in collaboration with Japan’s Sumitomo Corporation for over Rs 400 crore. This will be its second project in Chennai, after the Mahindra World City Special Economic Zone in Singaperumalkoil.
Although Man Infraconstruction is known for its several projects, the company derived its kick when ace investor Rakesh Jhunjhunwala picked up three million shares early this year. At this time last year, despite posting a weak Q3, Shah said the company would likely see a tepid Q4 too and the reason for the same is the shift in the company’s business model.
Realising that infrastructure projects were not tilted in their favour, it decided to venture into real estate contracting and development. It then went on to sign an MoU for the redevelopment of 12 buildings in Mumbai that would have a saleable area of 465,000 sq-ft.
Earlier, the company bagged an order worth Rs 1.05 billion from Gujarat Pipavav Port for executing civil construction works for port infrastructure.
However, one of the lowest order book size (it was a mere Rs 400 crore early this year), the company is optimistic and expects it to swell to Rs 2,000 crore on the EPC side.
On the real estate side, in the next five year’s time, the top line expected to be around Rs 8,000 to Rs 9,000 crore.
CHAIRMAN & MANAGING DIRECTOR
Mantri Developers has several ambitions. It supports green projects and wants to build the first zero waste project. And Mantri, the man, will tell you about his belief in PQRST - punctuality, quality, reliability, speed, and trust. Hailing from Pune, Mantri, based out of Bengaluru, and executing 10 projects in his adopted state, always longed to bring his own colour to Pune. He has fulfilled that dream by foraying into the Pune market with two projects with an investment of Rs 350 crore.
“New and exciting projects keep me going. We are investing a lot in our village concept, where the entire complex is self-sufficient. We want to control the environment better within the project compound and deliver a great experience for our users. I am really excited about some of our upcoming projects in this space,” he says.
The developer is now offering residential apartments and penthouses as part of its Mantri Webcity project. The project is being touted as the first techno-residential project inspired by new age technologies like nano technology, robotics, cloud computing, among other things.
With the online marketplace catching up, the developer recently sold a penthouse in Bengaluru for a sum of Rs 6 crore on Snapdeal.
The highlight of the year for Mantri was his election win as chairman of Naredco, a realtors’ body. Mantri is now highly active in taking up the cause of real estate developers. At a time when developers are desperate to acquire clearances for projects (some projects need as high as 80 clearances), he has been championing for a single window clearance and has managed to bag an assurance from the state government that it would receive priority.
He is also keen that the segment sees opening of FDI on affordable housing. “Foreign funding was need of the hour to meet the long term capital requirements and the real estate sector will have to source funding from both private equity players and non-banking finance companies (NBFCs),” he said at a recent conference.
Mantri is keen that the government needs to call for public-private-partnership for carrying out development on lands meant for affordable housing. As chairman of Naredco, he has also taken up the issue of the acute shortage of sand and would like the government to provide incentives for pre-fabrication to reduce dependence on sand.
The company has four upcoming residential projects of which two are in Mumbai, one in Pune and one in Solapur.
If you take a good look at residential and commercial properties developed by the Marathon Group in Mumbai, you wil realise that they stand apart from the milieu. And Shah attributes this accolade to the company’s policy of adopting designs that are quite uncommon. Says he, “The design should offer space and appear sturdy. Then one needs to ascertain that quality raw materials are being deployed for the structures. Green construction should be encouraged and promoted. High quality technology and materials should be utilised for construction purposes.”
The company has made it a habit to adopt technologies such as Mivan, PERI and STEN in its construction. Green building features such as low-E glass, energy efficient lifts, and solar envelope study are some of the innovations it uses widely. Shah cites an example of a suburban building built 25 years ago and continues to command South Mumbai prices. It was constructed with shear wall as opposed to the big columns that were popular. Shear walls is a rigid vertical diaphragm that offers lateral resistance to a high-rise as they are subject to lateral wind and seismic forces. “It worked,” he says.
CHAIRMAN & MANAGING DIRECTOR
While it is common for the promoters of greenfield ports to seek specialist private cargo handlers to run their specific facilities, here is a case where the developer of a private port on India’s eastern coast is looking for help from a port owned by the Indian government to spruce up its operations. Karaikal Port Pvt. Ltd (KPPL), the entity that runs the port at Puducherry, and a subsidiary of infrastructure and real estate firm MARG Ltd, have put forward a proposal to the Chennai Port Trust to use its deep draft mechanised berth at Karaikal to handle coal for Tamil Nadu Generation and Distribution Corp. Ltd (TANGEDCO) or take two of its berths on lease. The company is also in discussion with three entities to