State-run construction company NBCC charts expansion plans, larger overseas role | The Financial Express

State-run construction company NBCC charts expansion plans, larger overseas role

NBCC reported net profit of Rs 182.85 crore in FY22 while revenue from operations stood at Rs 5,546.61 crore.

State-run construction company NBCC charts expansion plans, larger overseas role
With a target to secure new orders worth Rs 6,500 crore in the current financial year, the company is also set to expand its footprint in foreign markets manifold, by exploring opportunities in countries including Saudi Arabia, Malaysia, Seychelles and Mauritius. (File Photo)

State-run construction company NBCC (India) has firmed up aggressive expansion plans, under which it will increase its presence in smart-city and aviation projects and accelerate redevelopment of assorted government properties and monetisation of its own land assets. With a target to secure new orders worth Rs 6,500 crore in the current financial year, the company is also set to expand its footprint in foreign markets manifold, by exploring opportunities in countries including Saudi Arabia, Malaysia, Seychelles and Mauritius.

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Chairman and managing director PK Gupta said the zero-debt company’s growth area will continue project management consultancy (PMC), which currently accounts for 93% of its revenue. The company, he said, is putting emphasis on faster execution of projects by adopting top-down suspended construction (as for ITPO, New Delhi), light gauge steel frame structure, pre-engineered building and composite steel frame techniques. “Overseas expansion is being pursued in a serious manner. We have recently secured a $130 million project in Maldives,” Gupta said.

“Given the rapid changes in the construction industry, we are entering new areas in India and abroad under the PMC segment. Besides, we are also keen to expand our EPC and real estate portfolios,” Gupta said. Development of the company’s own land parcels in cities like Coimbatore and Jaipur is also a potential profit area, he added.

Stating that the mandate given to the company by the Supreme Court to develop and complete stalled real estate projects of the Amrapali group in Noida and Greater Noida is “going as per our commercial objectives”, the CMD said NBCC is being paid PMC fees of 8% (of actual project cost) and an additional 1% marketing fees for sale of unsold inventories.

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NBCC reported net profit of Rs 182.85 crore in FY22 while revenue from operations stood at Rs 5,546.61 crore. Although execution of projects got stuck during the pandemic, the company had posted net profit of Rs 201.74 crore in FY21 on revenue of Rs 4,947.45 crore. Its net profits stood at Rs 99.44 crore in Q2FY23 while the previous quarter saw loss of Rs 13.2 crore.

He said NBCC is insulated from issues of recovering funds from home-buyers or disposing of unsold inventories, as it is only a PMC operator. “It (completing the stuck real estate projects under the SC mandate) is also an opportunity for NBCC towards fulfilling its social obligations,” he said.

Gupta, however, added that NBCC received complaints from some home buyers, which mostly pertain to payment, commitments as reached by them with Amrapali and individual loans with banks. He said a dedicated CRM team comprising NBCC staff members has been put in place to look into such grievances proactively.

Of the total incomplete inventory of Amrapali of 46,575 units, 618 units (of Eden Park in Noida and Castle in Greater Noida) were completed in 2019. At present, 45,957 units involving `7,842 crore are under execution with 10,000 labourers working on 22 projects. Of these, nine projects — Sapphire-1,Sapphire-2, Princely Estate, Silicon City-1, Platinum and Titanium, Zodiac, Silicon-2, Leisure Valley and Dream Valley — are nearing completion.

“We have completed work of around `3,402 crore till September and around `3,139.15 crore has been received from the clients (the SC-appointed court receiver) till date,” Gupta said. The company has completed around 5,500 flats in various stalled Amparali projects, of which around 1,750 have been handed over to the home buyers and another 6,300 will be completed by December, he added.

As far as sale of unsold inventories of the stalled projects is concerned, Anarock, the channel partner, has been given the mandate for 4,233 units. So far, 965 units have been sold and Rs 526.62 crore realised. Meanwhile, there is no major hurdle in the funding of the stalled projects. SBICAP Ventures has sanctioned Rs 650 crore for six projects and released Rs 300 crore. A consortium of seven public sector banks with Bank of Baroda as lead bank has been set up with sanction for funding of Rs 1500 crore to the remaining 18 projects; Rs 575 crore has already been disbursed.

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First published on: 23-11-2022 at 04:05 IST