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| Bajaj Capital / 12:10 Sep 17,2018 |
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| IRCON INTERNATIONAL LIMITED: Incorporated in 1976, Delhi based IRCON International Limited as a government company (under the ministry of Railways) engaged in the business of engineering and construction, specializing in major infrastructure projects, including, railways, highways, bridges, flyovers, tunnels, aircraft maintenance hangars, runways, EHV sub-stations, electrical and mechanical works, commercial and residential properties, development of industrial areas, and other infrastructure activities. Their reputation for quality, commitment and consistency in terms of performance, as well as their local, regional and international presence, has allowed them to service the growing infrastructure needs throughout India.
Business core operations are (i) construction and (ii) infrastructure development. |
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fjrigjwwe9r1research1:Article
Construction Business
In railway construction business, they are a turnkey construction company that specializes in new railway lines, rehabilitation/conversion of existing lines, station buildings and facilities, bridges, tunnels, signaling and telecommunication, and railway electrification. Projects are usually awarded to them directly or where applicable, the Ministry of Railways awards projects to them indirectly through nomination
As of March 31, 2018, they were undertaking a total of 33 railway projects in two countries internationally and in 13 states in India, with an aggregate length of 1,664.74 km. Order Book for these ongoing projects amounted to Rs.194, 257.70 million as of March 31, 2018, accounting for 86.70% of the total Order Book. Revenue from railway projects accounted for 77.12%, 68.26% and 68.95% of total revenue from operation for Fiscal Year 2016, Fiscal Year 2017 and Fiscal Year 2018, respectively.
Infrastructure Development Business
In the infrastructure development business, they develop and maintain railways and roads on a BOT basis. As of March 31, 2018, they had one completed road project of 115 km in India. They operate this completed project on a toll basis where profit is realized largely by toll collection during the concession period. They expect to complete two more BOT (toll) projects in Fiscal Year 2018 where they will start realizing toll revenues.
To drive development in less connected areas, the Government of India has adopted "hybrid annuity" mode, where the Government of India shares a portion of the total project costs, thereby freeing up developers' capital tied-up in one project for investment elsewhere.
Since they commenced operations in 1976, have serviced a diverse range of infrastructure and construction projects, and while the primary focus and strength are still deeply rooted in the railway sector, they have since diversified progressively into other transport and infrastructure segments, such as, highway and road construction, and expanded geographical coverage to many countries around the world.
In addition, although largest shareholder is the Ministry of Railways, they continue to carry on businesses as a legal entity separate from the Government of India, and remain an independent commercial enterprise which is legally, functionally, and financially autonomous from the Government of India, operating under the Companies Act of India and other applicable laws. More..
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