Reliance Infrastructure will not bid for small road projects even at the cost of losing market share anticipating heightened competition may dent profitability in such projects. Reliance Infrastructure aims to bag 8-10% of highway projects of up to Rs. 80,000 crore that are likely to be awarded every year. The company has now decided to bid for projects only worth Rs. 1,500 crore-2,000 crore and above, which may not be as impacted by high competition and lower-than-expected traffic as the smaller-ticket projects.
The company is; however, open to acquisitions of road projects of all sizes if valuations look attractive. After a lackluster second half in 2010 for National Highways Authority of India’s (NHAI) road projects, there has been a pickup in awarding orders as well as project execution. Some of the recent projects announced by the state-run NHAI saw bids from 40-45 players and this trend is likely to continue and increase pricing pressure for these projects.
There is no point bidding for projects worth Rs. 400-500 crore because the effort and management required for these is the same. So the firm would look for bigger urban centric projects where the growth and visibility would be higher.
After the transfer of most of its power assets and all upcoming projects to group company Reliance Power, Reliance Infrastructure has evolved as an infrastructure company, which operates as a developer as well as a contractor. It also generates and distributes power. Reliance Infrastructure has 25 infrastructure development projects in its kitty worth Rs. 40,000 crore. This includes 11 road projects worth about Rs. 12,000 crore covering 970 km.
crackcrack
| Company Name | CMP |
|---|---|
| NTPC | 333.30 |
| Tata Power | 401.25 |
| Power Grid Corp | 315.75 |
| Adani Power | 498.45 |
| Torrent Power | 1476.80 |
| View more.. | |
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