IL&FS Engg says current order backlog at Rs 8000cr

Vimal Kaushik, MD and CEO, IL&FS Engineering & Construction, in an interview with Udayan Mukherjee and Mitali Mukherjee, spoke about the latest happenings in his company and gave his outlook for the company going forward.

Below is a verbatim transcript of the interview. Also watch the accompanying videos

Q: IL&FS Engineering is about to get significant orders from its parent group and Saudi BinLadin Group (SBG). Can you just take us through some details there?

A: We recently had a brain storming session with both the promoters IL&FS and SBG. Both the companies will support and give us orders worth one-and-a-half billion each, over the next three years, which is a healthy outlook. We have come out of the old problems.

At the moment, we have a new avatar IL&FS Engineering and Construction Company. We have changed the name and it is looking good for us. As of now, we have an order backlog of about Rs 8,000 crore, and out of that, about Rs 2,500 crore have been acquired over the last 12 months.

Things are moving in the right direction. We have got our company registered in the name of Maytas in Saudi Arabia. We got a job from our partner and the work has started in Damam. It is a building work which is approximately USD 100 million.

On the other hand, Maytas Properties has also come with us. Maytas Infrastructure was working on a Hill County project which was a very big township. It has come under the ambit of IL&FS Engineering and IL&FS. We have started construction on that Hill County to complete that project.

In addition, the road projects are doing well. We have identified two-three more verticals. Earlier, we were working with roads, buildings and irrigation. We have identified the three verticals like power, maritime and oil and gas, where we wished to work on with a new name and full vigour.

Q: On the new orders that you are getting from the parent companies, could you just split the Rs 9,000 crore between IL&FS and Saudi BinLadin Group? Whether these orders are coming at comparable margins for your company or would you have to sacrifice on the margin front a little bit?

A: It will be on margin. As IL&FS Engineering, I am bidding only for EP projects. BOT projects are bid by our sister company called ITNL, which is another company of IL&FS Engineering and they do only BOT. Most of the other companies of IL&FS do only the BOT jobs. We being from the EPC front, all the construction work is being given to us.

With SBG, they have got an order backlog of about USD 40 billion. They recently got a job of Jeddah Airport, which is about USD 7-8 billion. In addition to that, they have got lot of work.

It took us some time to register our company and mobilise, but now, we are all fixed up and things have started moving. In the next three years, we will have enough orders to execute in Saudi Arabia.

Q: They have got an open offer at 208, which will close next week. What do you expect the shareholding of the company to be post this offer?

A: SBG is very keen. At the moment, they are about 20%. They will definitely go to more than 26% and definitely will acquire the shares.

Q: What will be the final shareholding? Who will have the management control?

A: The management control will rest with IL&FS. We are the leaders and we will be managing it.

Q: There are a couple of investments companies that are related to the Raju Family. Will they be participating in this offer? Will there be a change in stakeholding over there?

A: I can