IVRCL Assets and Holdings Ltd, a subsidiary of infrastructure major IVRCL Infrastructures and Projects Ltd, is planning to infuse equity of about Rs 1,300-1,400 crore in the next three years in order to boost its net worth.
IVRCL Assets currently has an equity base of Rs 123.61 crore and a net worth of Rs 2,400 crore.
The company has been working on boosting its net worth by shuffling assets and restructuring its portfolio.
For the year ended March 2010, IVRCL Assets had revenues of Rs 143.11 crore and a net loss of Rs 6.40 crore.
“We will start raising funds for equity infusion into IVRCL Assets this year. By the end of the third year, it should have an additional equity of about Rs 1,300-1,400 crore,” E Sudhir Reddy, IVRCL Infra’s chairman and managing director, told DNA.
The equity infusion would be primarily to strengthen the balance-sheet further for bidding for larger projects on its own. IVRCL Assets currently takes the strength from the parent company’s balance-sheet for bidding.
“The equity infusion would happen through three methods - selling the land we have, qualified institutional placement at the entity level and private equity at the asset or project level,” Reddy said.
The company has already set out on unlocking the potential in its real estate spread in various parts of the country. It has a land bank of about 3,300 acres and is willing to sell significant chunk of these land parcels. “We hope to raise about Rs 75-100 crore by selling land every year. The other modes of fundraising would depend on the market conditions and the valuations of the projects,” he said.
Its two key projects—desalination project in Chennai and the Salem-Kumarpalayam road project — are expected to go on stream shortly. “These projects would go onstream this year itself.
There are more projects in the pipeline and we are working on a revenue target of Rs 1,000 crore. Though the achievement depends on completion and commissioning of some of the projects, we are confident of doing it at the earliest,” he said.
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