Textiles and metals group Welspun is planning to grow its infrastructure portfolio through acquisitions.
Parvez Umrigar, managing director and chief executive officer of Welspun Infratech, said the company, which had already made two acquisitions on the construction side to build capabilities, was looking to add to its infrastructure development assets.
“The contracting side (the engineering, procurement and construction business) is largely fulfilled with the two acquisitions. On the developer side, we are on the lookout for acquisitions. It’s not necessary that at each project, the developer has to enter at the stage of primary bidding,” Umrigar told Business Standard.
He said while the company would continue to bid for projects at the primary stage, it would also look for good assets in public-private partnership projects.
“A secondary acquisition of a special purpose vehicle is not to be seen as a typical acquisition. In the developer business, it’s an asset model. You are not picking up a business of somebody, you are picking up the asset,” Umrigar said.
A part of the group’s objective to build an end-to-end infrastructure company was achieved last year, when it acquired Vadodara-based MSK Projects, engaged in civil construction of water supply and pipeline projects, road projects and industrial structures, for Rs 400 crore. It also acquired a 35 per cent stake in Leighton Contractors India, the Indian arm of Australia’s Leighton International, for Rs 470 crore.
These acquisitions will make the group’s infrastructure venture a Rs 1,000-crore company by the end of the year. “This year, Leighton-Welspun joint venture will be a Rs 2,500-crore company, where we will capture 35 per cent of the top line,” he said.
These acquisitions are also helping the company go through pre-qualifications to bid for projects. The JV with Leighton is also giving Welspun a first right over all qualification norms of the former to bid for projects. MSK brings in volumes in business with its play in international projects. “If we are going for offshore oil and gas projects, complex tunneling, etc, those are the domain of this international company,” Umrigar said.