Looking to bid for highway projects: Gayatri Projects

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Looking to bid for highway projects: Gayatri Projects

With Highway Minister laying special emphasis on roads, Gayatri Projects is looking to bid for a number of highway projects, the company’s Managing Director TV Sandeep Reddy, said

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Excerpts from Midcap Radar on CNBC-TV18 Watch the full show » ALSO READ See latest News about Gayatri Project See previous management interviews See what other Experts & Brokerages are saying about Gayatri Project

Gayatri Projects is looking to bid for a number of highway projects, the company's Managing Director TV Sandeep Reddy, said. With Highway Minister laying special emphasis on roads, Reddy said the company was looking for opportunities.

When asked whether the company would pick up a project that any big-ticket company like Maytas Infra had failed to execute, Reddy said it would do so only if there was right value.

Here is a verbatim transcript of TV Sandeep Reddy's exclusive interview on CNBC-TV18. Also watch the accompanying video.

Q: You have about 50% orders in Andhra, I am not saying that the order composition can change or the contracts can change. Do you see any change in terms of preferences for orders or do you see pretty much more of the same as we go forward specifically for companies like yourselves?

A: We go as per the opportunities which come to us. For instance, the national highway project, in the last 100 days or for the last one year nothing much has been happening, and now Kamal Nath has come forward with a lot of plans. We would look at bidding for a number of highway projects going forward this year. But as of now last quarter, we received a number of orders from the Andhra Pradesh government before the elections, which we are going to execute in the next four years.

Q: A number of the big ticket infrastructure companies seem to come out of Hyderabad, I am talking about Maytas Infra, Nagarjuna Constructions, GVK Power, do you have a situation where some of these companies may not be able to execute their contracts or may not find financial closure or may not be able to kind of delivery even if they get financial closure. Are you looking to pick up some of those projects? For example, Maytas does not want to do the metro project, will you pick it up? Are you looking to pick up some projects, which have already been allocated but may not get done by the guys who have it?

A: No, I do not think we would like to do that because it involves a lot of due diligence and if the project is available at right value, only then maybe we should pick it up. For example, we are doing 3 joint ventures with Maytas and Maytas in one project could not bring up its share of equity so we bought out its equity. The other two projects with Maytas, for example Maytas has sold two old tera projects and we are continuing with our own stake.

Q: What were the hurdle rates that you bought the Maytas project, if I am somebody who cannot put up the money obviously if you are bargaining with me you can ask for whatever you want. Is the hurdle rate 6%, 9% what did you pay them to buy out and what was their cost - maybe it will give us a range of what can others buy out if some of these guys can't do?

A: We bought the project at book value because we were actually partners in that project. We were three of them together. The project involved had some delays and because of the land problems on NHAI so eventually there was a cost overrun and it had to be funded so Maytas could not bring its share. So basically we bought that at book value.

Q: Are you looking at buying anything where you are a partner either with Maytas, Nagarjuna Constructions anybody else at this particular point of time and specifically asking about BOT?

A: No, we are not looking at it.