Dubai crisis: Which Indian companies may be affected

With dark clouds gathering around the global economy once again on concerns that two of Dubai-owned companies may default on their debt obligations, fledgling corporate India, which has begun spreading its wings globally in recent years, is feeling some impact here. India infrastructure companies especially have exposure to the Dubai economy and its once-booming real estate business.

Let’s run a status-check on which companies, especially in the infrastructure sector, are exposed to Dubai and how it may impact their businesses.

Nagarjuna Construction

YD Murthy, Executive VP - Finance of Nagarjuna Construction, said that the company has only one venture in Dubai, a 440-apartment project, and is going slow on it.

The company is also doing a Rs 100-crore water pipeline project at Dewa, Dubai. “There is no default payment problem at the Dewa project,” Murthy said. “The company’s Middle-East exposure is mostly to government-owned agencies,” he added.

Larsen & Toubro

Larsen & Toubro has exposure in multiple segments in Middle East, R Shankar Raman, Executive VP - Finance told CNBC-TV18. “The company has exposure in the hydro-power segment. Our total exposure to the Middle-East over the last two years is to the tune of USD 200 million,” he added.

Punj Lloyd

The infrastructure player has no exposure to Dubai or real estate exposure in UAE, Luv Chhabra, Director of Corporate Affairs at Punj Lloyd said. “We are doing only oil & gas projects in Abu Dhabi where there are no concerns at all,” he said. “40% of our order book comes from West Asia. The crisis has particularly hit the real estate sector in Dubai. No impact is expected in other states like UAE capital, Abu Dhabi.”

Voltas

MM Miyajiwala, Executive VP and CFO at Voltas, said the company is executing a Rs 900-crore project in Dubai as part of a joint venture where Voltas has 37% stake. “We are executing the project for Emaar and the client has fully funded the project. Thus, we are not anticipating any delays,” he said. “Our order book is primarily from Abu Dhabi and Qatar. Dubai also has not defaulted on any of our payments.”

Bank of Baroda

Bank of Baroda has some real estate exposure to Dubai accounting to 5–6% of its loan book but CMD MD Mallya there won’t be any impact. “Interest on all loans in Dubai have been paid till last due,” he said. “Bank of Baroda has 10 branches in the Gulf region. It has small banking exposure, mainly for remittances in the region.”

Mallya added that the bank also has exposure in Abu Dhabi, Ras-Al-Khaimah and Bahrain.

Unitech

The company said it had not exposure to Dubai real estate.

DLF

DLF has no exposure to Dubai, it said.

Indiabulls Real Estate

The company does not have any direct/indirect investment in Dubai and West Asia, it said. “Any of the Indiabulls Group companies and in particular Indiabulls Real Estate doesn’t have any direct or indirect investment in Dubai or Middle East,” the group stated in a release.

Hiranandani Group

The unlisted group is constructing a project in Dubai, 97% of which was already sold and 65% payment had been received, Chairman Niranjan Hiranandani said. “The Dubai market crash won’t have any negative impact on the company.”
Hiranandani added that Indian property prices should go up because of the Dubai market crash.

Omaxe

Omaxe is likely to exit its two real estate projects in Dubai. “We will soon decide on exiting the Dubai realty projects,” Dow Jones quoted Omaxe Chairman Rohtas Goel as saying.
“We had planned a Rs 2,850 crore investment in Dubai,” he said. “We have already paid Rs 50 crore to Nakheel as first instalment and may seek refund if we exit the Dubai project.” He added that Omaxe was yet to receive possession of any land from Nakheel.

HDIL

HDIL has no exposure to Dubai, it said.

SpiceJet

Dubai World’s investment arm, Istithmar, holds 13% stake in SpiceJet

Aban Offshore

The oil exploration company has deployed six rigs in West Asia.