Bandra-Worli Sealink Road
Bandra-Worli Sealink Road
Photo by BL Soni

Highways builder Dilip Buildcon Ltd (DBL) is in talks with large global financial investors to sell seven of its road projects.

The company that claims to be India's largest road construction company, currently building 16 per cent of all National Highways, has already sold five of its projects to Cube Highways.

"After the successful transaction of selling HAM portfolio with Shrem group, we have sold yet another portfolio of 5 HAM projects to Cube Highways, focusing on the efficient use of equity," the company said in its latest annual report.

It had won 12 HAM (hybrid annuity mode) projects in 2018-19.

The company is in talks with few "large global financial investors," in this regard, it said.

"We will continue to emphasise on improving the Return on Equity by exploring possibilities for monetising the remaining 7 HAM projects out of the 12 we had won in FY19, for which we are in talks with a few large financial investors," it said.

To fuel highway projects, the government had earlier approved HAM under which it provides 40 per cent of the project cost to the developer to start work while the remaining investment is made by the developer.

Even in these challenging times, Dilip Buildcon completed 14 projects worth Rs 10,544.5 crore in 2019-20, the company said and added out of these, six road projects were completed before the scheduled time and earned an early completion bonus of Rs 128.2 crore.

Dilip Suryavanshi, Chairman, Dilip Buildcon said: "As we move ahead, the strategy of ... company will be to focus on EPC (engineering, procurement, construction) projects, invest in equipment bank, improve process and control, recycle our equity and attract a talented workforce. We will look to de-risk our business through geographical and segmental diversification." In 2019-20, DBL won new projects valued at Rs 6,725 crore. These projects are won across five sectors viz road, mining, airport, special bridge and irrigation in 6 states.

Suryavanshi said: "Even in the midst of a pandemic, the company still managed to fulfil its target which is a promise we made to our shareholders. In FY20, your company completed many prestigious projects across several states in the roads and mining sectors. This proves that DBL's dedication and capability in executing projects are outstanding even during testing times." DBL will not spare any efforts in enhancing its execution skills through innovation, on-time delivery, strengthening its IT systems and other internal processes, he said.

For better financial performance, the company said it will improve its project selection strategy, increase control on costs, emphasise on cash flow generation and de-leverage the balance sheet for better returns.

It added that the company will continue to identify and capitalise on growth opportunities in various sectors.

"As we enter FY21, the journey ahead might be tedious and challenging, but we are determined to rise above the impediments and steer safely to a position of growth," Suryavanshi said.

(To download our E-paper please click here. The publishers permit sharing of the paper's PDF on WhatsApp and other social media platforms.)

Free Press Journal