See ARSS Infra as $1-bn co in few years, says Sunil Agarwal

ARSS Infra will be a USD 1 billion company in next few years, said President and CEO Sunil Agarwal.

In a free-wheeling chat with moneycontrol.com's Sagar Salvi, Agarwal said, the company has added new capex of Rs 500 crore and bought new equipment worth Rs 500 crore.

"This was a very important measure taken because no agency in India was able to provide all the equipment/machinery on hire for mega-projects like the ones we are handling," he said.

Commenting on last week's share price drop on pledge share concerns, Agarwal said, there is no need to panic for investors. "It has been done solely for bringing money into the company and funding one specific project," he said adding, "the charges are all secondary and there will be no primary charges."

Below is transcript of Agarwal's interview with moneycontrol.com

Q: Your shares went down considerably, last week, though they've recovered most of their losses. Is it another case of pledge share selling?

A: This is purely a market call and we have nothing to say about this, however, I would like to tell you that as a company we are doing well and we will continue to do well.

Q: The promoters hold nearly 55.2% out of which 44% of them are pledged. What is the purpose for which the shares have been pledged? Have you set any timeline for redeeming the shares?

A: Promoters pledging their shares for funding projects is not new. It is a very routine and normal procedure and our promoters have pledged their shares to get money into the company for the execution of a specific project. The project shall be executed in one to one and a half years and the debt shall be repaid within that period.

There is nothing to panic with respect to the pledging as it has been done solely for bringing money into the company and funding one specific project and the charges are all secondary and there will be no primary charges. The company has and will continue do well and add value.

Q: The stock has been battered in the last 12 months, down nearly 63%. Your quarterly revenues have been showing a declining trend. Are there any execution issues?

A: Since startup of the company, the company has seen growth and not a single dip, however, due to unseasonal rainfall in eastern part of the country where major part of our projects are being executed, the result of only the last quarter had shown a slight dip but the profits of the last quarter will reflect in the results of this quarter.

Q: You recently bagged two orders worth Rs 207 crore. What are the margins you expect on these orders? What is the kind of operating margins you are looking for this whole financial year?

A: These two orders are from the Madhya Pradesh Road Development Corporation (MPRDC). These orders come at a time when we are all geared up to execute the important BOT project from MPRDC. These two new orders from the Madhya Pradesh government fortifies our presence in Central India and also re-establishes the fact that we are focused on a pan-India presence and we are technologically and strategically well equipped to execute any number of projects across the globe well within time and sustain the ARSS brand value.

On this occasion I would like to mention that the ARSS Ideology is: We are committed to engineering Indian Infrastructure into Global Heights, and contributing our infrastructure development and project expertise in making Indian Infrastructure "Truly Global".