Gayatri to sell stake in Andhra Pradesh project to Megha Engineering

Hyderabad-based Gayatri Projects will bring onboard Megha Engineering & Infrastructures (MEIL) to execute a Rs2,200 crore state highway project in Andhra Pradesh, said vice-president, finance, KG Naidu.

Gayatri holds 74% and realty developer DLF 26% in the project to build a 207km stretch between Hyderabad and Ramagundam.

“We have applied to the AP government and only after the approval comes through can we decide how much we can sell,” he said.

Naidu had in May 2010 said the company would seek a strategic partner for the toll project, which involves expansion of the two-lane stretch to a four-lane one.
“Gayatri and DLF together would hold 52% of the equity and the balance 48% would be offered to the partner,” he had then told DNA.

TV Sandeep Reddy, MD, Gayatri Projects, said only Gayatri’s stake would be diluted and not DLF’s.

“DLF is more of a financial partner now,” he said, adding that funds for the project have been tied up.
MEIL is executing engineering, procurement & construction (EPC) jobs on the road along with Gayatri. This project is among Gayatri’s seven roads, of which three are operational. “The other three will start generating revenues in the next three months,” Naidu said.

Of the seven roads, four are annuity-based and three are on toll. Gayatri has an order backlog of Rs7,200 crore, about half of which is in irrigation.

“But we are going slow on irrigation projects worth Rs2,000 crore in Andhra Pradesh because payments are not coming through,” Naidu said. Gayatri is targeting a 25-30% growth in order book by March.