The Hindu Business Line : Afcons seeks joint venture partners to expand overseas

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Kolkata Feb. 14 Afcons Infrastructure Ltd, the flagship infrastructure construction company of the Shapoorji Pallonji Group, with over 100 specialised bridges and some 150 marine construction projects under its belt, is now actively seeking to further expand and strengthen its overseas operations.

Talking to Business Line here recently, Mr S. Paramasivan, Executive Director, Finance and Commercial Affairs of the company, said the company plans to explore opportunities in newer regions like Algeria and Sudan where large-scale infrastructure-related activities are taking place on multilaterally aided projects.

Pointing out that EPC (Engineering, Procurement and Construction) and design and build contracts constituted 37.78 per cent of the company's total order book position today, he said the current strategy was to provide cost and operational advantages to clients, for which Afcons was seeking to identify joint venture/consortium partners abroad. He put the company's current order book position at Rs 3,030 crore.

The company is already handling projects in Mauritius, Qatar, Oman, Yemen and Dubai. He also did not rule out growth through acquisitions abroad. He said the focus would continue to remain on marine projects, speciality bridges and Metro projects, while seeking increasing presence in sectors like Hydro/Tunnels and Oil and Gas pipelines where Afcons has entered recently.

Describing the company as a technology leader in all segments of marine construction business, he said Afcons was now handling the world's tallest railway bridge over River Chenab (at a height of 389 mtrs) with a steel arch for the Railways (Konkan Railway Corporation) to connect Katra and Laole on both sides of the river.

He said a 11.5-km tunnel will serve as approach to the bridge, a project entailing a cost of Rs 513 crore, said to be the single largest such project in the country till date. He said 20 per cent of the construction has been completed till date, and the project is scheduled for completion in 2009.

IPO draft

Mr Paramasivan said the draft red herring prospectus for a public issue, to be made through the 100 per cent book building process, has already been filed with SEBI.

Afcons proposes to offer 1,60,65,000 equity shares of Rs 10 each, and it comprises a net issue of 1,57,43,700 shares to the public with a reservation of 3,21,300 shares for eligible employees.

The issue, according to Mr Paramasivan, will constitute 18.37 per cent of the post issue paid up capital of the company, which is now 97 per cent owned by Shapoorji Pallonji Group.

He said the company intends to use the proceeds of the IPO for purchase of capital equipment, repayment of debt, general corporate purposes and strategic initiatives. The plan is to seek listing at NSE and BSE. The BRLM to the issue is Enam Financial Consultants.

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