M?rk?t ?nd Mumb?i ?nd D?lhi ?nd C?lcutt? for th?

M?rk?t Siz? ?nd Ch?r?ct?ristics of Infr?structur?
Industry

Infr?structur? s?ctor is th?
most import?nt p?rt of th? Indi?n ?conomy. Infr?structur? s?ctor includ?s d?v?lopm?nt
of urb?n infr?structur?, pow?r, d?ms, ro?ds ?nd bridg?s. ?ccording to th? D?p?rtm?nt
of Industri?l Policy ?nd Promotion (DIPP), th? For?ign Dir?ct Inv?stm?nt (FDI)
coll?ct?d in Construction D?v?lopm?nt from ?pril 2000 to M?rch 2017 is ?t US$
24.3 billion,

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?ccording to Gov?rnm?nt of Indi?, Infr?structur?
is on? of th? import?nt f?ctors in th? ?conomic d?v?lopm?nt of Indi?. Th? Infr?structur?l
Inv?stm?nt h?s s??n ? growth of ?pproxim?t?ly 5% of GDP in th? 10th Fiv?-Y??r
Pl?n for th? p?riod of 9% in th? ?l?v?nth Fiv?-Y??r Pl?n p?riod. Indi? Pl?nning
Commission h?s pr?dict?d ?n inv?stm?nt of US$ 1 billion to th? infr?structur? s?ctor
during th? 12th Fiv?-Y??r pl?n, with 40% of th? funds from th? priv?t?
s?ctor. Minimum 45% of th? Infr?structur? inv?stm?nt is tow?rd th? construction
& 20% of th? costs of infr?structur? will b? for th? mod?rniz?tion of th? construction
s?ctor.  Th? Indi?n gov?rnm?nt h?s diminish?d
for?ign dir?ct inv?stm?nt (FDI) st?nd?rds for v?rious s?ctors of d?v?lopm?nt of
infr?structur? to ?ttr?ct inv?stm?nts.

 

 

From th? ?bov?, ?s p?r th? ?xp?nditur? Budg?t
2016-17, th? ?xp?nditur? of Indi?n Gov?rnm?nt h?s r?is?d signific?ntly in Tr?nsport?tion
s?ctor wh?r??s for th? Pow?r S?ctor it is low. Now th?r? is ? gr??t opportunity
to t?k? complic?t?d proj?cts in Indi? wh?r?in not only cost ?ffici?ncy but t?chnology
?nd ?ffici?ncy is import?nt.

 

S?ctors
in Indi?n Infr?structur? ?nd th?ir r?l?tion with th? Rur?l ?nd Urb?n Infr?structur?

 

 

1)      Ro?ds ?nd Highw?ys:
Th? ro?d n?twork in Indi? is divid?d in th? motorw?ys, highw?ys ?nd rur?l ro?ds.
Th? priv?t? s?ctor is h?lping m?ny M?mb?r St?t?s to d?v?lop its str??ts. Th? v?lu?
of th?s? proj?cts is sm?ll?r th?t th? m?jority of th? proj?cts; NHDP is ?ss?nti?l
?nd provid? ? l?rg? ?ntr?nc? to oth?r pl?y?rs.

 

 

2)      ?irports:
Th?r? ?r? ? tot?l of 454 ?irports in Indi?, of which ?bout 90 ?r? op?n for comm?rci?l
s?rvic?s ?nd 16 ?r? d?sign?t?d ?s int?rn?tion?l ?irports. Th? priv?t? s?ctor h?s
inv?st?d in l?rg? qu?ntiti?s to improv? th? ?irport infr?structur?, in m?ny c?s?s,
with th? p?rticip?tion of th? priv?t? s?ctor in r?c?nt y??rs in D?lhi, Mumb?i,
Hyd?r?b?d ?nd B?ng?lor?. ?stim?t?s indic?t? th?t th? p?ss?ng?r tr?ffic it is hop?d
th?t will ris? to 320 million in 2022-23.

 

 

3)      R?ilw?ys:
Th? r?ilw?y und?rt?king in Indi? h?s th? fourth l?rg?st r?ilw?y n?twork, which includ?s
115,000 km (71,000 mil?s) of th? tr?ck ? ?long ? p?th of 65,000 km (40,000 mil?s)
?nd 7,500 st?tions. On? of th? m?in progr?ms int?nd?d to ?ttr?ct priv?t? inv?stm?nt
is th? proj?ct of th? corridor of th? d?dic?t?d lo?d. Th? proj?ct is int?nd?d to
r?li?v? cong?stion on th? rout?s b?tw??n D?lhi ?nd Mumb?i ?nd D?lhi ?nd C?lcutt?
for th? construction of lo?ding lin?s d?dic?t?d to ?n ?stim?t?d cost of US$6 billion-7
billions. Th? m?tro syst?m of th? city c?m? to Indi? in gr??t sh?p?.

 

4)      Ports:
Th? ports of Indi? ?r? cl?ssifi?d ?s import?nt ?nd Non-M?jor ports.. Th? ports of
Indi? m?n?g? mor? th?n 90 p?r c?nt of th? tr?d? of th? country to th? w?ight.
43 proj?cts of ?xp?nsion ?nd mod?rniz?tion of ports ?r? curr?ntly running with ?n
?stim?t?d cost of US$ 2 billion. Th? curr?nt c?p?city of th? m?in ports of Indi?
is 745 MMT ?g?inst tr?fficking of 545.79 MMT 2012-13, giving th?m ? c?p?city utilis?tion
of 73 %. Th? infr?structur? of ?xisting ports in Indi? is not l?rg? ?nough to h?ndl?
th? lo?d incr??s?, ?v?n wh?r? th? ports h?v? ?lr??dy b??n mod?rnis?d.

 

Urb?n
Infr?structur?:

?ccording to th?
Ministry of Urb?n D?v?lopm?nt, ‘Urb?n Infr?structur?’ should b? ?quipp?d with ?ll th?
n?c?ss?ry f?ciliti?s. It should giv? ? d?c?nt qu?lity of lif? to its r?sid?nts,
promising cl??n ?nd sust?in?bl? ?nvironm?nt by ?pplying sm?rt solutions in th?
dom?in of s?nit?tion, w?st? m?n?g?m?nt, public tr?nsport ?nd gov?rn?nc?.

N??rly 31% of Indi?’s curr?nt popul?tion liv?s
in urb?n ?r??s contributing to 63% of Indi?’s GDP (C?nsus 2011) ?nd with incr??sing urb?nis?tion, urb?n
?r??s ?r? ?xp?ct?d to hous? 40% of Indi?’s popul?tion ?nd contribut? to 75% of Indi?’s GDP by 2030. Indi?’s
urb?n growth is l?rg?ly conc?ntr?t?d in l?rg? citi?s with ? popul?tion of
100,000 or mor?, th? numb?r of citi?s with ? popul?tion ?xc??ding 1 million h?s
incr??s?d from 35 in 2001 to 53 in 2011, ?ccounting for 43% of Indi?’s urb?n popul?tion,
?nd is ?xp?ct?d to b? 87 by 2030.

V?rious
urb?n d?v?lopm?nt sch?m?s:

1.     
Sm?rt Citi?s Mission

2.     
?t?l Mission for R?juv?n?tion ?nd Urb?n
Tr?nsform?tion

3.     
Pr?dh?n M?ntri ?w?s Yoj?n?

4.     
Sw?chh Bh?r?t Mission

5.     
FDI Policy

6.     
N?tion?l Inv?stm?nt ?nd Infr?structur?
Fund

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

M?rk?t Tr?nds

Th? infr?structur?
s?ctor of Indi? h?s ?volv?d from proj?cts fund?d by th? Gov?rnm?nt pur?ly for n?w
busin?ss mod?ls th?t involv? p?rti?l or tot?l own?rship of th? priv?t? s?ctor.

P?st:

Th?r? w?s littl?
import?nc? to th? cr??tion of infr?structur? ?ss?ts, with th? Gov?rnm?nt, which
is both ? f?cilit?tor ?nd provid?r of infr?structur?.

Pr?s?nt:

Th? b?ginning
of th? l?st d?c?d? h?s s??n ?n incr??s? in inv?stm?nt in th? infr?structur? s?ctor,
?ccomp?ni?d by ? tr?nsform?tion in th? busin?ss mod?ls with th? mor? ?ctiv? p?rticip?tion
of th? priv?t? s?ctor in th? form of ? public-priv?t? p?rtn?rship (PPP) proj?cts,
?sp?ci?lly in th? ?l?ctricity s?ctor ?nd ro?ds.

Pr?s?nt Issu?s:

1. Th? ?cquisition
of l?nd ?nd of ?cc?pt?nc? of th? ?nvironm?nt

2. L?ck of coordin?tion
b?tw??n th? v?rious gov?rnm?nt?l ?g?nci?s.

3. Improp?r
configur?tion of th? proj?cts, in p?rticul?r th? distribution of risks ?nd b?n?fits
b?tw??n gov?rnm?nt ?nd th? priv?t? s?ctor

4. L?ck of ?
good m?ch?nism for th? s?ttl?m?nt of disput?s b?tw??n priv?t? ?ctors ?nd ?g?nci?s

5. Th? ?xt?rn?l
d?bt of th? d?v?lop?rs of th? infr?structur?, du? to d?l?ys in th? impl?m?nt?tion
?nd irr?tion?lity.

Futur?:

W? n??d to w?lcom?
l?rg? industri?l zon?s, th? d?v?lopm?nt of sm?rt citi?s ?nd cr??tion of logistics
n?twork. ?mploym?nt opportuniti?s ?r? ?lso ?xp?ct?d in th? ?r?? of urb?n infr?structur?
d?v?lopm?nt, such ?s th? gr??t urb?n tr?nsport ?nd w?t?r supply proj?cts in urb?n
c?nt?rs, c?us?d by r?pid urb?niz?tion.

 

M??sur?s to improv? th? futur? of infr?structur?:

1. Th? d?l?ys ?nd irr?gul?riti?s should b? r?duc?d

Th? Gov?rnm?nt
should cr??t? ? uniqu? m?ch?nism of ?uthoriz?tion for th? v?rious ?pprov?ls. It
is n?c?ss?ry to ? good r?gul?tor to monitor th? progr?ss of th? ?uthoriz?tion ?nd
coordin?tion with v?rious gov?rnm?nt?l ?g?nci?s. ?fforts ?r? ?lso n??d?d to ?nsur?
th? impl?m?nt?tion of th? contr?cts ?t th? s?m? tim? bound ?nd in ? tr?nsp?r?nt
m?nn?r, with th? ?im of ?ttr?cting priv?t? inv?stm?nt ?nd FDI. ?g?nci?s such ?s
th? C?bin?t Committ?? on Inv?stm?nt (ITC) n??d to b? mor? pro?ctiv? to cl??r b?cklog
of proj?cts.

2. Structuring of ?ppropri?t? proj?cts –

Curr?nt m?ch?nism
for structuring ? proj?ct ?s ?n ?PC or dpi or 100% of th? priv?t? prop?rty n??ds
to b? r?look?d to t?k? ?ccount of th? diff?r?nt risk profil?s of proj?cts. How
to priv?t? ?ctors h?v? b?com? m?di?ns for risk-r?turn profil? of th? proj?cts,
th? Gov?rnm?nt must b? put into thinking ?bout th? right w?y to th? ?x?cution of
th? proj?ct. Th?r? is ? n??d to cr??t? ? m?ch?nism for th? s?ttl?m?nt of disput?s
for PPP proj?cts. Th? right c?r?, must ?lso b? pl?c?d in th? conditions of th?
contr?ct for th? provision of suffici?nt gu?r?nt??s for th? pl?y?rs of ?xt?rn?l
circumst?nc?s.

3. Th? d?v?lopm?nt of fin?ncing m?ch?nisms to
m??t th? n??ds of th? s?ctor,

Infr?structur?
comp?ni?s h?v? difficulti?s in r?ising funds, such ?s th? b?nks h?v? limit?d ?xposur?
to this s?ctor, whil? th? for?ign funds ?r? not ? m??ns to inv?st in th? s?ctor.
In this s?ns?, th? long-t?rm d?bt instrum?nts such ?s th? int?rn?tion?l p?nsion
funds will r?duc? th? cost of d?bt ?nd, th?r?for?, th? vi?bility of proj?cts of
infr?structur?. Th? propos?l for n?w inv?stm?nt v?hicl?s such ?s inv?stm?nt trusts
(th? infr?structur? for th? s?curitiz?tion of ?ss?ts) ?nd infr?structur? d?bt fund
(in th? study of institutions such ?s th? IL&FS IIFCL, ?tc.) should b? quick
to giv? ? boost to th? s?ctor.

4. ?ff?ctiv? proj?ct m?n?g?m?nt –

Priv?t? comp?ni?s
must ?volv? th?ir proc?ss?s to ?mploy th? b?st proj?ct m?n?g?m?nt tools ?nd t?chniqu?s.
Th? ?uction ?nd th? ?ss?ssm?nt proc?ss must b? t?mp?r?d with ? gr??t?r ?mph?sis
on th? ?stim?t?s of r?v?nu? ?nd th? id?ntific?tion of proj?ct risks. Comp?ni?s
n??d to r?solv? th? probl?ms ?ssoci?t?d with th? l?ck of skill?d l?bor ?nd improv?
th?ir pr?ctic?s of supply ?nd m?n?g?m?nt of proj?cts, to r?duc? th? incid?nc? of
cost ov?rruns during ?x?cution.

?xp?ct?d
Growth Tr?nds:

Th? futur? of th? glob?l construction industry
looks good with opportuniti?s in r?sid?nti?l,

non-r?sid?nti?l, ?nd th?ir infr?structur?. Th?
glob?l construction industry is ?xp?ct?d to r??ch ?n ?stim?t?d $10.5 trillion
by 2023, ?nd it is for?c?st to grow ?t ? C?GR of 4.2% from 2018 to

2023. Th? m?jor driv?rs for th? growth of this
m?rk?t ?r? incr??sing housing st?rts ?nd rising

infr?structur? du? to incr??sing urb?niz?tion ?nd
growing popul?tion.

 ?m?rging tr?nds which h?v? ? dir?ct imp?ct
on th? dyn?mics of th? construction industry

includ? incr??sing d?m?nd for gr??n construction
to r?duc? c?rbon foot print. D?spit? ?dv?rs? ?conomic conditions, th? glob?l construction
industry witn?ss?d growth

during th? p?st fiv? y??rs ?nd th? m?rk?t is for?c?st
to r??ch US $3,304 billion in 2017 with ?

C?GR of 7.5% ov?r th? n?xt fiv? y??rs. Th? org?niz?tions
of m?jor glob?l ?v?nts ?r? ?xp?ct?d to provid? imp?tus to th? construction industry
ov?r th? for?c?st p?riod.

Within th? glob?l construction industry, th? r?sid?nti?l
s?gm?nt is ?xp?ct?d to r?m?in th?

l?rg?st s?gm?nt. Fin?ncing for r?sid?nti?l construction
proj?cts h?s b?com? ?v?il?bl? with

improv?m?nts in m?rk?t fund?m?nt?ls, lik? low?r
int?r?st r?t?s.

?P?C is ?xp?ct?d to r?m?in th? l?rg?st m?rk?t
during th? for?c?st p?riod m?inly du? to

incr??sing urb?niz?tion, high?r ?xp?nditur? on
infr?structur?l d?v?lopm?nt, ?nd ?fford?bl?

housing proj?cts.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

M?rk?t Structur?

 

DLF:

Th? comp?ny’s US$2 billion IPO in July, 2007 w?s Indi?’s bigg?st IPO in history.6 In its first qu?rt?r r?sults for th? p?riod ?nding
30 Jun? 2007, th? comp?ny r?port?d ? turnov?r of ?31.2098 billion (US$490 million) ?nd profits ?ft?r t?x?s of ?15.1548 billion (US$240 million)

M?jor proj?ct:

DLF-HUD? ?xpr?ssw?y

DLF Ltd ?nd H?ry?n? Urb?n D?v?lopm?nt ?uthority (HUD?), in public-priv?t?
p?rtn?rship, h?s comm?nc?d th? work for ? 16- l?n?, 8.3 km ro?d n?twork in Gurg?on.
This public-priv?t? p?rtn?rship is ? culmin?tion of y??rs of pl?nning, with th?
b?sic obj?ctiv? of cr??ting sust?in?bl? infr?structur? f?cility ?xt?nding from
NH-8 Toll Pl?z? to S?ctor 5556, in Gurg?on.

This ro?d will m?k? tr?v?lling within Gurg?on much ??si?r ?s it is
fully int?gr?t?d with th? R?pid M?tro syst?m ?nd is propos?d to c?t?r to futur?
R?pid M?tro lin? from Sik?nd?rpur to ?nd of th? S?ctor Ro?d.

This corridor will ?lso b? sign?l fr?? providing fr?? mov?m?nt for
commut?rs on ?ith?r sid? ?nd will f??tur? 6 und?rp?ss?s, th?t will not only r?duc?
nois? pollution but will ?lso pr?v?nt public inconv?ni?nc?. Th?r? is ?lso ? d?dic?t?d
corridor for s?ctor 25 to s?ctors 55 & 56 which will mitig?t? tr?ffic conflict
?nd th?r?by ?n?bl? smooth flow of m?in tr?ffic. Th? ro?d is s??ml?ssly int?gr?t?d
into th? urb?n infr?structur? which compris?s of s?w?r?g?, dr?in?g? syst?ms ?nd
oth?r utiliti?s m?king it ?n int?gr?l p?rt of th? urb?n syst?m. It ?lso f??tur?s
? d?dic?t?d utiliti?s corridor to f?cilit?t? m?int?n?nc? in futur? without c?using
public inconv?ni?nc? ?nd digging of th? ro?d s?ction.

SWOT
?n?lysis:

Str?ngths:

1. Its
?xposur? ?cross busin?ss?s, s?gm?nts ?nd g?ogr?phi?s r?duc?s th? imp?ct of ?conomic
cycl?s
2. ?xp?ri?nc? of ov?r m?ny d?c?d?s in Indi?n r?t?il
s?ctor with ?n ?xp?rtis? in th? fi?ld
3. Strong m?n?g?m?nt t??m

 

W??kn?ss?s:

1.?ff?ct?d du? to
l?ck of r?gul?tions ?nd ?ff?ctiv? polici?s
2.M?jorly pr?s?nt only in Indi? ?nd limit?d glob?l ?xposur?

 

Opportuniti?s:

1.R?duction in int?r?st
r?t?s
2.T?x inc?ntiv?s for housing inv?stm?nts
3.Short?g? of hous?s in urb?n ?r??s

 

Thr??ts:

1.Incr??sing int?r?st
r?t?s
2.?conomic downturn
3.Vol?tility in fin?nci?l m?rk?ts

 

L?rs?n
& Toubro:

L?rs?n &?mp; Toubro is ? US$14.3 billion t?chnology,
?ngin??ring, construction ?nd

m?nuf?cturing ?nd fin?nci?l s?rvic?s conglom?r?t?.
It ?ddr?ss?s critic?l n??ds in k?y s?ctors

including infr?structur?, construction, hydroc?rbon,
pow?r, d?f?nc? ?nd ??rosp?c?. Its

footprint ?xt?nds ?cross s?v?n countri?s in ?ddition
to Indi?. ? strong, custom?r-focus?d

?ppro?ch, conform?nc? to glob?l HS? st?nd?rds ?nd
th? const?nt qu?st for top-cl?ss qu?lity

h?v? ?n?bl?d th? Comp?ny to sust?in l??d?rship
in its m?jor lin?s of busin?ss for ov?r 75

y??rs.

Som? m?jor proj?cts of th? comp?ny ?r?:

1.     
 Coimb?tor? Byp?ss

2.     
 P?nip?t ?l?v?t?d Corridor

3.     
Krishn?giri byp?ss in Krishn?giri, T?mil
N?du

 

SWOT
?n?lysis:

Str?ngths:

1. M?rk?t l??d?rship providing comp?titiv? ?dg?

2. Strong t?chnic?l ?xp?rtis? r?inforc? l??d?rship

3. Div?rsifi?d r?v?nu?s providing r?sili?nc?

4. Ov?r 45,000 ?mploy??s form ? p?rt of its workforc?

5. It h?s off?rings lik? Construction, H??vy ?quipm?nt,
?l?ctric?l ?quipm?nt, Pow?r, Shipbuilding, Fin?nci?l s?rvic?s ?nd IT S?rvic?s

 

W??kn?ss?s:

1.D?p?nd?nc? on dom?stic
op?r?tions for r?v?nu? g?n?r?tion

2. Incr??sing d?bt
imp?cting fin?nci?l fl?xibility

 

Opportuniti?s:

1. Str?t?gic joint v?ntur?s str?ngth?ning busin?ss

2. Strong proj?ct pip?lin? ?nsur?s r?v?nu? growth

3. Growing Indi?n construction & ?ngin??ring
industry

 

Thr??ts:

1. Ris? in cost of construction m?y ?ff?ct m?rgins

2. Ch?ll?ng?s in l?nd ?cquisition lik?ly to ?ff?ct
busin?ss

3. Int?ns? comp?tition m?y r?duc? profit?bility 

 

 

 

 

Hindust?n
Construction Comp?ny:

Hindust?n Construction Comp?ny w?s found?d in
1926. HCC is Winn?r of Glob?l

Sust?in?bility L??d?rship ?w?rd. HCC st?nds ?mong
old?st infr?structur? comp?ni?s in th?

country ?nd it und?rt?k?s v?rious proj?cts lik?
?xpr?ssw?ys, bridg?s, tunn?ls ?nd pow?r ?tc.

HCC m?rk?t c?pit?l st?nds ?t Rs 1,905 ?s on July
2015.

Som? m?jor proj?cts of th? comp?ny ?r?:

1.     
L?v?s? City

2.     
Kolk?t? M?tro

3.     
D?lhi M?tro

 

Str?ngths:

1. It h?s ?round 100 y??rs of op?r?tion?l ?xp?ri?nc?
which giv?s it ? hug? ?dv?nt?g? ov?r its comp?titors.

2. HCC Ltd. ?x?cut?s l?rg?-sc?l? civil ?ngin??ring
?nd infr?structur? proj?cts such ?s hyd?l pow?r pl?nts, nucl??r pow?r pl?nts, ?xpr?ssw?ys
?nd highw?ys, tunn?ls ?nd bridg?s.

3. HCC w?s th? first construction comp?ny in Indi? to b? c?rtifi?d
for ISO 9001, ISO 14001 ?nd OHS?S 18001 for its qu?lity, ?nvironm?nt?l ?nd occup?tion?l
h??lth ?nd s?f?ty m?n?g?m?nt syst?ms.

4. It h?s ? t?l?nt?d workforc? of ?round 3000 ?mploy??s.

 

W??kn?ss?s:

1.  It h?s limit?d glob?l pr?s?nc? ?s comp?r?d
to glob?l pl?y?rs.

2. Onlin? pr?s?nc? ?bout th? comp?ny is v?ry
l?ss?r wh?n comp?r?d to big pl?y?rs.

 

Opportuniti?s:

1. It c?n ?xp?nd its op?r?tions glob?lly.

2. It c?n do Soci?l M?di? br?nding
to incr??s? its glob?l br?nd ?w?r?n?ss.

3. ?cquisition of sm?ll?r pl?y?rs ?nd g?ogr?phic
?xp?nsion c?n r??ch out to n?w?r custom?rs

 

Thr??ts:

1. It f?c?s strong comp?tition from
glob?l pl?y?rs ?nd Indi?n comp?ni?s.

2. Strong gov?rnm?nt r?gul?tions ?lso pos? hindr?nc?
to fr?? op?r?tions of HCC in Indi?.

 

GMR Infr?structur? Limit?d:

GMR Infr?structur? limit?d is st?nds ?t 3rd position
in th?

list of top 10 infr?structur? comp?ni?s in Indi?,
th? comp?ny h?s found?d in 1996, it is

involv?d in v?rious proj?cts lik? ?n?rgy, r??l
?st?t?, highw?ys, ?nd ?irports ?tc, ?nd it’s

m?rk?t c?pit?l st?nds ?t Rs 8,049 Cror? ?s on
July 2015.

Som? m?jor proj?cts of th? comp?ny ?r?:

1.     
R?jiv G?ndhi Int?rn?tion?l ?irport,
Hyd?r?b?d, T?l?ng?n?

2.     
Indir? G?ndhi Int?rn?tion?l ?irport, N?w
D?lhi