Supreme Court receiver has allowed NBCC to work on 8 projects of Amrapali: Pawan Kumar Gupta, CMD
Closure of Projects in Delhi: Maximum of our projects are located in Delhi and all of these projects have remained closed 24 hours for a month and a half months due to Supreme Court's order. The night-time ban is still on.
Pawan Kumar Gupta, Chairman and Managing Director (CMD), National Buildings Construction Corporation (NBCC), talks about Q3FY20 financials, Jaypee Infra acquisition and work on Amrapali projects as well as stressed projects among others during a candid chat with Swati Khandelwal, Zee Business. Edited Excerpts:
Q: What led to a sharp drop in terms of revenue as well as profit?
A: Our turnover went up by 15% when compared to the last quarter, however, it declined by 20% in comparison to the same quarter of the corresponding year. It has happened due to certain reasons like
(i) Closure of Projects in Delhi: Maximum of our projects are located in Delhi and all of these projects have remained closed 24 hours for a month and a half months due to Supreme Court's order. The night-time ban is still on.
(ii) Nauroji Nagar Project: We were not able to start work on our flagship project of Nauroji Nagar as haven't received permission from the High Court of Delhi.
(iii) Excessive Rains: The country has faced excessive rains this year. Normally, it doesn't rain in October but it occurred this year, which had affected our work on certain sites.
But we will perform better in the next quarter.
Q: Total expenses have come down but we saw a big spike in finance costs. Was this a one-off for this quarter?
A: It will tamper-off after a quarter or two. It is a minor post and is not permanent.
Q: What is happening on Jaypee Infra acquisition and by when the formalities and procedures of the same will be completed? How will you arrange the funds for it?
A: Jaypee, which had time till February 6, 2020, by the NCLT, had got a month's extension from the supreme court. The case is being heard and the next hearing will happen on February 17, 2020, and the results will be declared by March 6, 2020. Apart from this everything is going fine and the committee of creditors (CoC) has given 97% votes to us and the arguments are on in the NCLT. As far as its funding is concerned then we have sufficient funds in the form of land and unsold inventory as well as cash. We will form a company and start the work as soon as the decision is announced by the NCLT.
Q: Update us about the Amrapali projects and when you will start work on it? How will you arrange the funds for it?
A: The Supreme Court receiver has allowed us to work on 8 projects of the group and we have started working on 4 projects and the tenders of two other projects will be finalised in the next few days. However, the tenders of the remaining two projects will be passed after some time. But, we have funds for all these eight projects. The court receiver has granted permission to work only on projects for which funds are available.
Q: Any other stress projects that you will be looking to acquire? What is the order book of the company?
A: We are sitting on an order book of Rs72,000 crore, at present, and it is expected that it will go up by Rs3,000 crore by the end of the year. Thus, we will have an order book of Rs75,000 crore by the end of this year.
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When it comes to projects then we have started working on certain old projects like Gomti Nagar Railway Station and we have sold real estate inventory of around Rs103 crore. We are tendering for the Bharat Vandana Park and its work will be started soon. Work on Karkardooma transit-oriented developments will be started next year. Apart from this, the work on other projects like IIM Vishakhapatnam and IIM Sambalpur will start soon.
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