NBCC has bagged a contract worth ₹120 crore from the Archaeological Survey of India for the construction of an Institute of Archaeology and a UNESCO Category-II Centre in Greater Noida. BTVI spoke with Anoop Kumar Mittal, CMD, NBCC.
Excerpts:
This contract has a completion period of 24 months from the date we commence it. We expect to start the project in January 2017, so revenues will start being booked by Q4FY17.The project will be completed by the end of 2018.
Where does the total order book stand and what’s the outlook for the near future?
The total outstanding order book is at ₹70,000 crore, and I expect another ₹10,000 crore of orders in the remaining part of the financial year. So we will close the order book at end FY17 at around ₹75,000 crore.
You had indicated that 51 per cent of the purchase of Hindustan Steel Works’ stake will be done in the next few months. What update can you give on that?
The government has already approved this, and the process is on for NBCC to take over that company. I hope that all formalities are completed before December. We will take 51 per cent, and then decide later on merging it. The government has agreed to take care of all of that company’s loans and debt, except for ₹200 crore, which we have to invest jointly. That would put NBCC’s burden at ₹100 crore.
Analysts have pegged the value of the stake at ₹120-150 crore. Is that accurate?
I am giving you an approximate figure. When the deal is done, it could go up to ₹120 crore.
What kinds of synergies would this acquisition bring to you? Where do you expect to take it in the future?
Hindustan Steelworks Construction is primarily into steel-plant construction. It also takes on PMC (Project Management Consultant) jobs the way NBCC does. The PMC projects have synergies with NBCC. Once the takeover is done, we see some advantages. Firstly, they are experts in steel-plant construction. Secondly, they have the know-how on using steel in construction of buildings. In the future, NBCC plans to use more steel. The buildings will have composite structures with greater steel components. We will use their expertise in that.