Atlanta Limited commenced its business activities in the year 1977 as Atlanta Construction Company, a Partnership Firm, which was converted into a Private Limited Company in January 1984. In 1985, the Company introduced IN-SITU Bituminous Recycling Technology in executing projects in the States of Rajasthan, Maharashtra, Tamil Nadu and Delhi using a modern Road Milling Machine imported from Germany. In 1987 the Company was awarded a World Bank Loan aided project for ?Strengthening 93 km road in Tamil Nadu?. In 1988, the company was awarded the contract for ?Strengthening of Runway at Bombay Airport?.
Mr. Rajhoo Bbarot, Managing Director, Atlanta Ltd, holds a bachelor?s degree in science from the University of Mumbai. He has 25 years of experience in construction business and has carried out a wide range of civil engineering projects of large magnitude like that of construction of Highways, Airfield Pavements, Buildings, Reinforced Concrete Tracks, and Mining. He was also a member of the Mechanisation Committee set up by the Ministry of Surface Transport for upgradation and modernisation of road construction equipments, from 1988-1990. He is a member of the ?Working group on National Highways for privatisation of roads? of the Confederation of Indian Industries.
Speaking with Anil Mascarenhas of India Infoline, Mr. Bbarot says the company?s unexecuted order book is in excess of Rs3bn and would be completed within the next two years.
What are the new opportunities and challenges in this industry.
There are several players starting from large ones such as L&T and Gammon and several smaller players too. There is enough room for all to grow. But a clear defined strategy and ability to raise funds is going to be important.
Opportunities are all around us. Infrastructure growth is necessary for the development of the country. There are big opportunities in roads, ports, public-private partnerships for utilities and so on. The Government is planning to allot road projects worth Rs1,500bn to private players by 2012. Out of Rs1,850bn to be invested in road projects by the year 2012 around 80% of works will be executed by the private companies. The Government plans to invest Rs1,850bn in roads, Rs600bn in ports and Rs400bn in airport projects. The Government has decided to connect all roads and railways missing links to ports and a dedicated railway freight corridor will be developed shortly. The Government has also upped the future road project investments from Rs1720bn to Rs1,858.73bn.
The Government intends to invite investment proposals for Rs420bn in balance work in NHDP I and II, Rs550bn in NHDP III, Rs250bn in NHDP IV, Rs402.50bn in NHDP V, Rs150bn in NHDP VI, Rs150bn in NHDP VII and Rs146.23bn in the Special Accelerated Road Development Programme for the North Eastern Region.
Give us an idea of your order book. By when will it be executed?
Unexecuted order book is in excess of Rs3bn to be completed within the next two years. This includes projects under MMRDA and NHAI. However, the BOT for Mumbra Bypass is on our balance sheet and reflected in CWIP for FY2006. No revenues or profits are booked on this. The toll collections for Mumbra bypass would start by end of the current calendar year.
Any government policies which could cause an impact to the industry?
Not really. Government thrust on infrastructure is clear and policies are being designed to facilitate additional private participation.
Price trends in raw materials. Is there an escalation clause in your contracts?
Yes there is an escalation clause and so we will be protected from any raw material price increase to that extent
Any new trends you are witnessing in the industry?
Besides the technology developments and increasing opportunitines, the biggest trend being witnessed in our industry is the shift towards BOT.
Tell us some of the projects you have done especially in the BOT segment.
The Udaipur bypass was done on Build, Operate and Transfer (BOT) Basis in 1996. This involved construction of a 11-km long two-lane bypass road , with five major structures. We completed the project in 18 ? months. This is against the schedule of 36 months as per concession agreement.
Prior to that, in 2000-2001, we were awarded the project for construction of Mumbra bypass on BOT basis at the cost of Rs359mn. The scope of the project was increased by adding grade separator along with Railway over Bridge (ROB) in the year 2004-2005. The cost was increased by Rs290million. This work is completed to the extent of 90% and the project is likely to be commissioned shortly.
What about mining?
We are active in the Mining Sector. We have Modern Mining equipment like Surface Miners imported from Wirtgen, Germany and Loaders from Volvo, Sweden. In August 2003, we successfully completed the work of "Extraction and transfer of coal/Coal Measure Strata by deploying Surface Miners for Open Cast Project (OCP) on job work basis at Belpahar for Mahanadi Coalfields Limited, subsidiary of Coal India Limited. The contract value of the project was Rs40.91mn. We have also been awarded other OCPs amounting to Rs402.21mn for Mining for extraction of approximately 12.79 million cubic meter of coal from Mahanadi Coalfields Limited at Bharatpur and Kalinga, Orissa.
You mentioned your foray into real estate. Going ahead is this going to add significantly to your revenues?
It is not something new that we are doing. We had completed the first project in 1991 when we made a commercial complex in the name of Atlanta Tower in Mumbai admeasuring 18,000 sq.ft. approximately for a value of Rs22.5mn. We did another two more projects for construction of commercial complexes. We have made an entry in the real estate development business where we are developing a 31,000 sq mtr property in Thane.
What is the size of the issue? When are you hitting the market?
Atlanta Limited, the company in the business of construction, realty, infrastructure and mining, proposes to enter the capital market on 1st of September 2006 with a public issue of Rs. 43,00,000 equity shares of Rs. 10 each in a price band of Rs. 130 to Rs. 150 per equity share. The issue closes on 7th September 2006 and will constitute 26.38 % of the post ? issue paid up capital of the company. Karvy Investor services Ltd., UTI Securities Ltd and SREI Capital Markets Ltd are the BRLMs for the issue and Karvy Computershare Pvt Ltd is the registrar.
Atlanta Ltd. proposes to utilize part of the net proceeds of the issue to meet the investment requirements in Balaji Tollways Ltd, a SPV incorporated for the execution of the Nagpur- Kondhali four lane BOT project. The plans also include investments in real estate projects, purchase of plant and machinery for mining activities and also for construction and real estate business.
Brief us on your financials? What is the outlook going ahead?
I cannot quantify anything in terms of numbers as far as the outlook is concerned. But the look at our performance over the last couple of years will give you an idea. Our total income has gone up from Rs265.11mn in FY02 in FY02 to Rs812.76mn. During the same period, PAT has risen from Rs24.11mn to Rs49.05mn in FY05. During the twelve months ended March 2006, the company has achieved revenues of Rs1071mn and a net profit of Rs155.65mn.
What is the purpose of the issue?
We are raising funds to meet the investment requirements in Balaji Toll Ways Limited; a Special Purpose Vehicle incorporated for the execution of the Nagpur-Kondhali four lane BOT project. The funds raised will also be utilized for purchase of plant and machinery for mining activities as also for construction and estate business. We propose investment in real estate projects. The rest of the proceeds would be used for partial pre-payment of high cost debt and to meet the incremental working capital requirements. We are also exploring the option of obtaining a loan for part financing the equipment proposed to be purchased for our mining, construction and real estate activities.