 "Satish Parakh")
In an interview to Hrishikesh Joshi, Satish Parakh, MD of Ashoka Buildcon speaks about the latest happenings in the company and its future plans. He also shares his views on the recent toll collection controversy in Maharashtra. He expects positive growth in the sector in near future. Edit excerpts.
Some political parties are demanding for 'toll-free' Maharashtra. There were agitations against toll collections in Maharashtra, what is your take on the this controversy?
These agitations were in some pockets of Maharashtra where toll collection was done illegally. We always welcome fair practices and transparency in toll collection system. I don't think such incidences will affect our business.
Also, your company is witnessing slowdown in toll collection across India over past three quarters, do you see growth in this quarter?
The last quarter was very good for us. Due to economic slowdown, we have witnessed some decline in collection. But it is a just a matter of time, the situation is now picking up and as a result we have done good business in the last quarter.
How do you see the growth in the infrastructure sector?
I am very much optimistic about the sector growth. We have experienced lull in the sector but now it is picking up slowly. There will be growth of 15 to 20 per cent in the sector in near future. The picture will be more clear after the Lok Sabha elections this year. Currently, our company is growing 12 per cent on y-o-y basis.
What is the size of your current order book?
We are looking to grow order book by Rs 1,500-2,000 crore per year. Recently, we have bagged Rs 24 crore contract from National Highways Authority of India (NHAI) for collecting user fee at Kognoli Toll plaza in Karnataka. Also, we have a project worth Rs 596.28 crore from Tamil Nadu's Generation and Distribution Co (TANGEDCO), Chennai. The company’s order book presently stands at Rs 4,100 crore.
What about PE investments in Ashoka Buildcon?
Our company has raised Rs 110 crore from third tranche of PE Investment from Macquarie-SBI Infrastructure Fund (MSIF), a joint venture infrastructure fund of State Bank of India (SBI) and Australia's Macquarie. They have committed to invest $150 million (Rs 800 crore) in Ashoka Concessions Ltd. Including this tranche, the total equity investment by Macquarie-SBI in ACL comes around Rs 490 crore and balance would be received as per equity requirements of projects under construction. This is the second time that Ashoka Buildcon has raised private equity. The first was in 2006, when IDFC Private Equity invested in the company.
Tell us something about company's journey so far?
We began as a small contracting firm in Nashik Maharashtra. Today it is one of the top five infrastructure developers in the roads, bridges and power sector employing more than 4,000 people. The company has moved up the value chain from being just an EPC player to a BOT developer. With an asset base of over 18 owned projects (12 road BOT and six foot-over bridges) and seven road BOT projects in Ashoka Concessions (ACL), a subsidiary of Ashoka Buildcon, the company has developed strong visibility.
