Tata Opportunities Fund (TOF), the flagship private equity fund advised by Tata Capital, announced an investment of Rs 335 crore in Tata Projects (TPL), an engineering, procurement and construction (EPC) services company and a closely-held company of the Tata group for FY 2015-16. Hyderabad-based Tata Projects and TOF is exploring investments in the EPC space. The partnership between TPL and TOF bolsters its ability to raise additional resources, when required, Vinayak Deshpande, MD, TPL tells BV Mahalakshmi. He says that the company has now diversified into urban infrastructure projects keeping its base as industrial infrastructure and has an order book worth over R19,000 crore.Excerpts:
Having strategic business units – industrial infrastructure, urban infrastructure and quality services – how do you see the segments growing and can you detail few key projects?
Being one of the fastest growing EPC companies for executing power and steel plant projects, we have now diversified into railways, metro projects, building and hospital projects. We have diversified into urban infrastructure segments as we find rapid growth in these sectors even while we see less growth across steel industry, refining or oil and gas industry. We are also seeing investments in power, transmission and distribution sector by state electricity boards (SEBs) such as Telangana SEB, Andhra Pradesh SEB and NTPC.
Specifically, we commenced work on Western Dedicated Freight Corridor project in January 2016, to build a 320-kilometer section; a dedicated freight line connecting Delhi and Mumbai. The company, along with IRCON International, is part of the Express Freight Consortium, which is led by Mitsui & Co, of Japan. The project is to build 320 km long stretch from Vaitarana in Maharashtra to Vadodara in Gujarat We are already well advanced in constructing 343 km stretch of Eastern Freight Corridor project. Besides, in partnership with GYT China, we have won a crucial section of Delhi Metro phase three R700-crore project.
What is the status of the power and social sector projects?
In the power sector, we are working with PGCIL, Sterlite, TSTRANSCO and APTRANSCO for building transmission lines to strengthen the southern grid. We have commissioned more than 12,000 kms of transmission lines across multiple voltage levels including 800 KV double circuit projects. As a customised turnkey solution provider, we have executed complex projects including 2X800 MW Balance Of Plant for Sri Damodaram Sanjeevaiah Thermal Power Station at Krishnapatnam for APGENCO. We have recently received an order from Jaipur Development Authority for “Rejuvenation of Dravyavati River (Amanishah Nallah). It’s a 47.5 km long rain fed river which has become a sewage canal. The project envisages intercepting sewage, putting up eight sewage treatment plants, recharging the river with clean water, securing its banks and landscaping. The order value is R1,677 crore, which includes operations and maintenance for 10 years.
What is the current order book position, its status and execution period? Going forward, how do you see the trend?
With the current projects, we are seeing a good growth in our order book position since last three years. We have secured R10,000 crore worth fresh orders this year itself and have a cumulative backlog worth R19,000 crore besides R7,000 crore orders as L1 participant. These orders will be executed over three-and-half-year period. We expect the revenues to grow double digit from 2017 onwards.
Going forward, what would be your focus areas including smart cities?
In the urban infrastructure space, we would focus on improving the operations and look at expanding the existing business. We would also be investing in digitalisation so as to improve site monitoring, cost reduction besides improving the engineering skills. As urbanisation is happening rapidly, we would be looking at smart cities besides smart buildings, airports, urban transport systems and hydro projects. Under smart cities, we have formed a core group to focus on various smart city modules. For Smart Homeland Security, we are offering monitoring systems – emergency services and integrated solutions as a master integrator.
How about your overseas plans? How do you plan to stabilise your projects?
Currently, we are in Middle East and Eastern Africa markets for refining and power generation and transmission. About 10% of our revenues come from these two markets. We hope to increase this share to 25% in the next three years. We are working with Exim Bank India, World Bank and few other developmental banks, while doing projects in these geographies.