Malaysian firm plans Rs 400 cr IPO

Encouraged by its success in constructing the 142-km Satna-Maihar-Umaria road and a 246-km road in Amarkantak-Shahdol with an investment of Rs 30 crore in Madhya Pradesh, Malaysian firm IJM (India) Infrastructure Ltd will float its initial public offer (IPO) next year. The firm has also completed the Mumbai-Pune expressway.

"We will come out with an IPO next year for our infrastructure projects," N G Chin Meng, executive director, IJM India, told Business Standard recently.

"We will plan the listing since we are eyeing more projects in Madhya Pradesh. " However, he said the issue might be of Rs 400 crore or more, but "it is up to our merchant banker".

IJM is an arm of IJM Corporation Berhad and is the second-largest and one of the highly-rated companies for infrastructure projects in Malaysia.

"We may participate in four-lane road projects in Madhya Pradesh," Chin Meng said.

The state has 18 national highways that cover 4,676 km. A four-lane project of 621 km has been completed, and the remaining 4,055 km is to be jointly completed by the central government and the state government. The state has earmarked Rs 100 crore for the development of national highways passing through the state.

"We are soon to float four-lane projects," said Mohammed Suleman, managing director, MP Road Development Corporation (MPRDC). The state has maintains 494.80 km of national highways and 154 km of renewal work.

"India, particularly Madhya Pradesh, is a better option for us since society and the government machinery are similar to Malaysia's," said Cheng.

Rs 1600-crore IJM has invested Rs 380 crore in India and Rs 30 crore in Madhya Pradesh and is likely to venture into real estate projects too.

At present the company is incurring a loss of Rs 60,000 per day in toll collection at the build-operate-transfer road of Rewa-Shahdol-Amarkantak and Stana-Maihar-Umaria, against the expected toll collection of Rs 100,000.

"We will be able to cover the losses once traffic increases," said Cheng.

The MP government's plan for 6,000 km of highways and 2,022 km of additional roads before 2008 is welcome news.

The state will join hands with domestic and global firms to complete 6,000 km of highways (of the 8,099 km of state highways) and 2,022 km additional roads.

Fifteen roads were to be constructed through the build-operate-transfer process, said Chief Minister Babulal Gaur.

Rs 100 crore will be invested in linking places of tourist importance through quality roads.

However, the government has not done a feasibility study on heavy-traffic roads. The Indore-Bhopal road, which reports at least one accident a day, has not been completed so far.

The MP Road Development Corporation (MPRDC) has been asked to scout for partners. The corporation was created in July last year. The maintenance of the state highways of 8,099 km will be its responsibility.

The state has completed work on four roads through the build-operate-transfer basis: the 203-km Indore-Edlabad road (Rs 123 crore); the 134-km Ujjain-Jhalawad road (Rs 65.19 crore); the 246-km Rewa-Shahdol-Amarkantak road (Rs 110 crore); and the 141 km Shahdol-Umaria road (Rs 54.22 crore).

"We are following strict norms. There will be toll barriers after each 80 km. The private partners will maintain the roads for 15 years. All these roads will conform to the Indian Road Congress's specifications," said Mohammed Suleman, managing director, MP Road Development Corporation.