GMR looks to swell its orderbook four-fold – Plans to add more Rly projects into its portfolio

GMR-Infrastructure_4Mumbai:  GMR Infrastructure Ltd, which recently won its railways construction project, is looking to increase its order book from the current Rs.250 Crore to Rs.1000 Crore next year. The debt-laden company has been pursuing an asset light strategy for over the last one-and-a-half years.

It is now looking at adding more construction projects into its portfolio. “For a construction project with monthly payment by the client, no investment is required by the group in terms of equity or borrowing. Also, the risks are lower as compared to public private partnership (PPP) projects,” said Arun Kumar Sharma, CEO of GMR Urban Infrastructure & Highways.

The infrastructure development company also has an engineering, procurement and construction (EPC) arm which was set up for captive construction of its own projects. However, it has been winning orders from outside the company as well.

GMR’s recently order win of railway line construction between Jhansi and Erich Road in Uttar Pradesh, worth Rs 267 crore, in which it has a share of Rs 135 crore. It hopes to win more such orders across sectors. “The preference for size of orders is Rs 250 crore and above,” said Kumar, in response to a questionnaire.

GMR became one of the biggest infrastructure companies in the country by winning two airport projects in Delhi and Hyderabad. It has even developed airport projects in Istabul, Turkey as well. However, in the last few years, the company like many of its peers, has been burdened by debt and increasing interest costs.

GMR has since been exiting from many big projects which have finished with their construction phase, like two of its road projects recently have been monetized. Earlier, it had exited from a Singapore power plant investment and is also known to be looking to exit a few power projects which have finished construction.

The stock of the company is down by 0.4% today and is trading at Rs 20.7 at 10:30 am.