Interest in infrastructure

On the radar of Afcons Infrastructure Limited, the sturdy infrastructure company of the Shapoorji Pallonji (SP) Group, are the large and lucrative markets of Africa. Afcons is currently constructing a Rs 75 crore oil jetty in Mauritius for the Mauritius Ports Authority (MPA). "This is our first major project with an Indian company in the marine infrastructure field and we are satisfied with the progress,” Business India of March 25, 2007 quotes Shekur Suntah, deputy director general, MPA. "This has so far truly showcased India’s ability in the area of infrastructure building.”

Afcons, in which the SP group holds 98 percent stake, is also exploring large projects in Algeria, Angola and Liberia. It is reportedly negotiating with a Japanese firm for contracting a part of its two billion dollar work in Algeria. Afcons has a large order book of over Rs 3,000 crore. Renowned for its specialty jobs in high-end fields like hydro-tunneling, bridge building, etc, Afcons is also executing complex projects in India — marine, civil and pipeline projects in Jamnagar, Gujarat for Reliance, a bridge over the Chenab river in Jammu and Kashmir for the Konkan Railway Corporation, the Baramulla rail link in the same state for Konkan Railway, bridge project for East Central Railway, etc.

Afcons is reportedly looking at a turnover of Rs 1,000 crore this fiscal. For several months the market has been abuzz that Afcons is to come out with its IPO (Initial Public Offering). This would make it the first time the low-profile SP group would be offering equity in one of its group companies to the public. When contacted, company sources stated they were unable to confirm anything and advised a wait and watch policy. Forbes Gokak, also a group company, was already listed when Pallonji Mistry bought it from the Tatas. The Forbes billionaires list 2007 ranked 77-year-old Pallonji at No 137 worldwide and the 10th richest Indian (Adi Godrej and family were No 210 worldwide and 11th in India). Much of Pallonji’s wealth lies in his 18.4 percent stake in Tata Sons, the holding company of the Tata group.

The 140-year-old SP group, well known for its quality of construction, is reported to have a bank of 2,000 acres of prime land in Bombay, Poona, Madras, Calcutta, Gurgaon, Nagpur and Mysore, with upcoming projects spanning the spectrum of IT parks, malls, residential and commercial space. "The process is currently on to raise around $300-400 million by selling stake in various projects to private equity (PE) funds. However, nothing is final yet,” The Economic Times of March 9, 2007 quotes SP director Jimmy Parakh. PE funds in Singapore, UAE etc are said to be interested in these projects which are foreign direct investment compliant. The 60-storied twin towers being built at Tardeo in Bombay will be among the tallest buildings in India.