Brahmaputra Infra expects 10-15% margins from NTPC order

Brahmaputra Infrastructure bagged Rs 5338.42 crore order from power major NTPC today. Joint managing director Sanjeev Prithani told CNBC-TV18 that the company expects to get 10-15 percent margin from this order.

The order for development and operation of Chattibariatu coal mining block in Hazaribag, Jharkhand, for a period of 24 years has been won by consortium of Brahmaputra Infrastructure, BLA Projects Pvt Ltd and GSCO Infrastructure, he added. Also read: L&T Construction wins orders worth Rs 3057cr
Brahmaputra Infrastructure, which recorded revenue of Rs 370 crore in last year, does not plan to raise fresh funds for executing this order as it already has required equipments in place. This project would mark the company's foray as mines developer operator (MDO).
In a separate statement issued today, Brahmaputra Infrastructure, Managing Director Manoj Kumar Prithani said, "This order value is one of the highest for any domestic MDO issued by a public sector company. This order is in line with our existing business activities. We have got a huge opportunity to prove our capabilities as an MDO and increase our topline from the issue."
Brahmaputra Infrastructure has almost 75 percent promoter holding. It is into infrastructure development under hospitality and realty sector. Below is the verbatim transcript of Sanjeev Prithani's interview Q: Can you give us more details with regards to this particular order which your joint venture (JV) has bagged from National Thermal Power Corporation (NTPC) which is worth around Rs 5338 crore. Who is the JV with and want would the details of the order consist of for example in terms of execution and potential revenues that you could gain from this?
A: This order is to the tune of Rs 5300 crore. This is one of the largest orders for any mines developer operator (MDO) from a public sector company. This is in line with our existing business activities. The mining activity we have been doing since seven-eight years and as a lead member this is a great achievement for our company. We have got good opportunity to prove our capabilities as an MDO and increase our top line from this vertical. Q: According to the data we have your market cap is Rs 204 crore. With a market cap of Rs 204 crore will you have the execution capabilities for Rs 5340 crore order it looks so big. Aren't there any minimum qualifications?
A: Rs 5300 crore is over a period of 24 year so annually it would be Rs 250-300 crore. Q: Do you have other orders like this or this is the only order?
A: No because these kinds of orders don't come very often. This is one of the few MDO projects which have been awarded. The difference between the normal mining projects and the MDO project is that these are generally for long duration. Q: Normally in a year how many crores worth of orders are you able to execute? Are you able to execute over Rs 250 crore worth of orders?
A: Yes annually we are doing around Rs 400-500 crore of order execution. Q: What is your top line because the BSE does not have any financials at all about you?
A: Last year we did Rs 370 crore in revenues. Q: What are the margins for the latest order?
A: For the latest order we have 10-15 percent margin. Q: Would you look to dilute some amount of your promoter holding, would there be any fund raising which would be on the cards of the company?
A: As of now we don't see requirement for this because the investment which is required for this project initially for three years the equipments required for this project already the company owns. And once the requirement comes in then the business capacity equipments would be required. Q: Coming back to this NTPC order can you just give more details in terms of the other bidders and were you the only bidders in this project?
A: This was done through a proper prequalification process. Altogether five JV companies had qualified for this project and in the financial bid three companies had participated. There was an Australian company; there was another consortium of Hyderabad companies. Q: Who is your JV partner in this?
A: BLA Projects from Kolkata and GSCO Infrastructure. Both are mining companies. Q: What is your stake in the JV?
A: We are the lead member. In a consortium the percentage is not specified.