Punj Lloyd eyes toll management

To float JV with a global player for the business. Punj Lloyd, one of the leading engineering construction companies in the country owned by the Delhi-based Punj group, is actively considering to float a joint venture company with a global player for toll management. At present, the company does not operate in toll-related activity.

According to sources at Punj Lloyd, it is likely to float a separate company for toll management with an established global player sometime in the next financial year.

The sources informed that Punj has already divested stake in majority of the BOT (build-operate-transfer) projects it was in as the company was not keen on toll management.

However, the company is changing its stance as it feels that toll management is going to be a major area of revenue as the Union government has already decided to construct the third phase of NHAI (National Highways Authority of India) on the BOT and BOOT (build-own-operate-transfer) basis.

Punj Lloyd has also earmarked Rs 50 crore for the possible joint venture for future NHAI projects.

The new company may form a consortium with Punj Llyod to participate in the bidding for NHAI third phase projects to be constructed through BOT and BOOT with minimum government funding.

Besides, the company is now planning to foray into new areas of construction like airport, port and hydel power with foreign partners.

Punj Lloyd currently has exposure in the road infrastructure, power, and oil and gas sectors domestically and overseas.

It is tapping the market with a public issue of 91 lakh shares at a price band of Rs 600-700. The issue will hit the market on December 13.

Rajiv Kaul, the company's executive director (finance), refused to divulge the details of the toll management business. However, he said the decision of the union government to construct the NHAI third phase via BOT and BOOT would make toll management extremely lucrative.

"A few companies have already started doing this in India. So far we used to divest our stake in special purpose vehicles (SPV) floated for BOT projects as we did not want to block our money for 10-15 years. But things are now changing, and construction companies should learn the toll management too," he said.

The Punj group has not divested stake in only one road SPV called Thiruvantapuram Road Development Company.

Punj Lloyd posted a turnover of Rs 1,790 crore in 2004-05.