From RIL to L&T and Adani, corporate giants build on EPC rule change

A shift from the high-debt hybrid annuity scheme for infra projects to a low-debt, performance-linked model is encouraging government and private majors to pivot to this business in a bigger way

The year-end announcement by Reliance Industries Ltd (RIL) to the stock exchanges stating that it would merge its engineering, procurement and construction (EPC) subsidiary Reliance Projects and Property Management Services with itself offers a strong signal of a significant shift in the nature of government infrastructure contracts that is shrinking the space for smaller infra companies in favour of larger ones.
 

Apart from Larsen & Toubro, which has been in the EPC business for years, the coming year is likely to see big groups such as Adani, Tata Projects and RIL as well as government-owned Rail Vikas Nigam Ltd pivot