IRCON International is one of the companies the government is looking to sell up to 15 percent stake. The company's order book indicates that it has been able to withstand the COVID-19 storm, recently bagging orders from NHAI and NCRTC.
In an interview with Moneycontrol, SK Chaudhary, Chairman and Managing Director, IRCON International, spoke about the status of the stake sale by the government, the company's overseas projects and the sector battling the COVID-19 pandemic.
Edited excerpts:
Q: How has the sector managed to tackle the after-effects of the COVID-19 pandemic?
Chaudhary: Things are looking up now. With positive news of vaccine coming, things will soon fall back into place. The second quarter GDP numbers indicate that recovery is in place. The GST collections are also picking up, and we can only expect things to improve further.
Q: Can you give an update on the stake sale?
Chaudhary: The government holds 89.1 percent stake in IRCON. As per SEBI guidelines, it has to be 75 percent. Merchant bankers have been appointed and we are currently in discussions with them. This is the right time to divest. It should be done by January or February and there should be no reason for delay. We are ready from our side although the DIPAM will decide on the time.
Q: How are IRCON's overseas projects placed?
Chaudhary: In countries like Algeria, Bangladesh, Nepal, Sri Lanka, Myanmar where we had projects, we faced the same problems as in India due to COVID-19 restrictions. Fortunately in Sri Lanka, Algeria, and Bangladesh, the effect of COVID-19 was considerably less and we were able to resume work soon. Right now, there are no issues with those projects.
Q: Due to the COVID-19 pandemic, has there been any major changes in the capex plan?
Chaudhary: There's no change in the capex plan. Operations of the company now are at almost 70-72 percent of what we achieved last year and I think by March, we should able to do somewhere around 90 percent of last year. So, that will be quite a good achievement. Due to blockades and restrictions, the supply chains have been affected. Contractors are also suffering. But concessions have been given by the government and it will help in maintaining the cash flow. So, I expect execution of projects to pick up.
Q: Are you happy with the order book?
Chaudhary: We have recently bagged two orders – one form NCRTC and the other is Gurgaon-Pataudi-Rewari section of NH-352W. We will start on these projects shortly. We are bidding for more projects and expect order inflow to touch Rs 7,000 crore in this financial year.
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