NBCC has an order book of Rs 70,000 crore: Pawan Kumar Gupta, CMD

Pawan Kumar Gupta, Chairman & Managing Director (CMD), NBCC (India) Limited, talks about Q1Fy21 number, margins, future outlook, two projects of Seychelles, PSU projects, land bank policy of the PSUs, Jaypee Infratech Ltd and Amrapali project among others during a candid chat with Swati Khandelwal, Zee Business. Edited Excerpts: 

Q: Your numbers were weak in the first quarter. What led to this fall and what is your outlook for future quarters in terms of demand and construction activity?

A: The construction activities were started in the post-COVID time. But there are concerns related to labour as we don’t have required number of labours. So, the construction activity is happening at a slightly slower speed. But work on 130 projects of the running 200 projects have started all over India, however, we have around 50% of the required labours at present. There is a gradual increase in labour supply and I hope that work will start at full speed in the second half of September 2020. Besides, we have a good order book of around Rs 70,000 crore in two segments. Now, we have a major focus on Amrapali project and work on 16 projects has been started of which two have been handed over after completion. 

Q: Your margins and profits have contracted severely. When do you see recovery in it?

A: Situations are quite uncertain at present and it depends on the situation of the coronavirus. But there is a hope that October onwards there will be an increase in turnover and accordingly the margins will return to the previous levels. At the same time, I expect that effect of coronavirus will also end by that time but it is difficult to say it with complete certainty because a lot of things depend on the coronavirus. Many of the sites are still under lockdown and frequently, many sites move under the lockdown when there is a specific effect. 

Q: Can you tell the overall percentage at which work is going on at present?

A: The work is happening at two-third sites. 

Q: Recently you have bagged 2 project orders worth Rs 204 crore in Seychelles. Give us more information about the order you won? Also, tell us about the expected orders you are likely to win in the next few quarters?

A: We have two works in Seychelles and they are (1) construction of the police headquarter worth around Rs 100 crore and (2) construction of the AG office worth Rs 100 crore. In addition to this, another project is under discussion in Seychelles and we expect that the project will be handed over to us. Besides, discussions are going on in Maldives and Nigeria and we expect that we will get projects in these two countries as well. Within India, we are hopeful of getting a Land Redevelopment Project in Andhra Pradesh. Currently, we are working on land auction and assessment. Similarly, we are likely to get Delhi Jal Board’s redevelopment project of Jal Vihar in Lajpat Nagar. We may get the orders of Odisha Hydropower Corporation’s canal lining and development work. So we are working on these projects and talks related to the redevelopment projects are going on with many PSU clients, like MMTC and Hindustan Insecticides, they have land parcels in Delhi, which can be redeveloped and we expect to get this work as well. 

Q: What can be the quantum of the two projects, PSU project and other projects, that you have talked about?

A: They are large orders like the order at IIIT Delhi can reach up to Rs 2,000 crore in the next three-four years. MMTC order is going to be somewhere around Rs 1,500 crore, while the Hindustan Insecticides Limited (HIL) order can be of around Rs 400-500 crore. Apart from this, we have received a small order worth around Rs 46 crore to develop Rajya Sabha Housing Complex in RK Puram and the MoU will be signed soon. 

Q: The central government is working on a scheme and NBCC is likely to play an important role in the Land Bank Policy in which the state-appointed land development agencies can provide a great opportunity in it to pull the lands lying with PSUs and provide them to MNCs. What is your view on it and how big the opportunity can be for you?

A: We are the appointed land management agency for the central government’s PSUs which can be shut down or are sick. In this, we have also submitted our report related to the usage of the land lies with the PSUs to the central government, MMTC and HIL are a part of the same. This can be a big opportunity because huge land parcels of the central PSUs and the central government are lying either vacant or with old structures at different places, which can be used by falling them. Interestingly, all these projects are going to be the self-sustainable basis and will not require the government’s investment at all, rather they are likely to get income from them. 

Q: What is the latest update regarding the takeover of the Jaypee Infratech Ltd?

A: NCLT changed certain conditions of the NBCC’s resolution plan while accepting it. After this, around 10-11 parties have filed an appeal against the decision and they were being heard, however, these appeals were transferred to the Supreme Court on August 6 and the next hearing is scheduled to be heard on August 31, 2020. Now, it is expected that the Supreme Court’s decision on these cases will be announced soon after which NBCC will be able to take over the pending works and complete it at the earliest. 

Q: What can be the timeline by which the work will be started?

A: It will depend on the Supreme Court’s decision. Transfer of the Supreme Court has taken over all the cases, means the removal of a channel named NCLAT. It would have taken more time if the parties would have moved to the apex court after the verdict of NCLAT was pronounced. The Supreme Court has taken these cases on a priority basis that’s why we hope that the matter will be decided soon. 

Q: Also update us about the conservation project of the Delhi’s Purana Qila excavation site and the kind of opportunity you are seeing there?

A: NBCC has not only revised the Purana Qila but it has also worked on many sites of the Archeological Survey of India like Qutub Minar, Red Fort, Jallianwala Bagh in Amritsar. In the process, NBCC has adopted these sites, renovated them and turned them to be tourist-friendly sites. The Purana Qila project worth around Rs 6 crore and we will start working on it soon and have planned things accordingly. 

Q: There is news that easy instalment offers will be provided to the Amrapali buyers. What is your view on this development and how are you moving ahead towards the project and how it will be completed?

A: There are positive developments in Amrapali projects. It has been divided into 24 projects of which one is a commercial project while the remaining 23 are residential. We have awarded the contracts of 16 projects of these 23 projects and two of those have been handed over and work has been started on remaining 14 projects. Besides, tenders of another five projects have been floated and they will be finalized soon. It is a total project of Rs 8,400 crore in which a major part of the money has to come from the homebuyers. The money, however, was not coming from them as their loans were declared as NPAs by the banks. But the Supreme Court in its decision has asked the banks to grant loans to them and fixed their instalments. So, they are supposed to pay money in four instalments in seven projects, 25% each, while they can pay the money in 10 instalments, 10% each, in remaining 12 projects at different stages, which is more or less are linked with the construction.

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So now the money will start coming in those projects by the end of August. All the obstacles of the project have been removed and going ahead, it is expected that the projects will run smoothly.