g r infraprojects ltd share price Management discussions

<dhhead>Management Discussion and Analysis</dhhead>

Global economic overview

The global economy has been grappling with several headwinds in FY23, including new COVID variants, Europes food and energy crises, combined with geopolitical conflicts such as the war between Russia and Ukraine, which might result in further economic upheavals. At the beginning of FY 2023, the global economy demonstrated initial signs of a soft landing. However, recent financial sector turmoil and sticky inflation have dimmed the prospects for sustained growth. Risks are relatively skewed to the downside as debt levels remain high and geopolitical tensions intensify. The economic slowdown is predominantly impacting advanced economies, particularly the Eurozone and the United Kingdom. Additionally, the tightening of monetary policies by central banks worldwide is likely to result in a decline in global inflation rates. On the other hand, some countries, such as Japan and Australia, have indicated that they plan to maintain their accommodative monetary policies to support their respective economies. Overall, the effects of tightening monetary policies on the global economy remain uncertain and will largely depend on each countrys specific economic conditions and policy decisions.

While the global economy faces significant risks from the ongoing pandemic and geopolitical tensions, there are positive indicators of a gradual yet consistent recovery. Notably, many emerging markets and developing economies (EMDEs), including India, are making significant strides forward, with forecasts suggesting significant growth rates this year.1 The emerging markets and developing economies (EMDEs) have demonstrated remarkable resilience, with factors such as strong domestic demand, resilient exports and favourable government policies aiding their recovery. Additionally, these economies are set to benefit from improving global economic conditions, which are expected to drive increased demand for commodities and boost trade activities. This growth in emerging markets and developing economies could be instrumental in bolstering the global economic recovery and mitigating the effects of the pandemic and geopolitical risks.


Encouraging signs of a slow but steady recovery from the pandemic and the Russia-Ukraine war-induced shocks have emerged. The reopening of borders in China has alleviated some of the supply chain disruptions, facilitating global trade. Furthermore, emerging markets and developing economies (EMDEs) are anticipated to become the driving force behind global economic growth in the upcoming years. Despite the inflationary pressures, the global economy is being buoyed by a steady labour market, increased domestic spending, an influx of foreign capital and a solid response to the energy crisis in Europe. The future of the global economy critically depends on the proper calibration of monetary policies, the course of the war in Ukraine and the removal of pandemic-induced supply-side constraints.

Indian economic overview

Notwithstanding the intensifying geopolitical concerns, the Indian economy is estimated to have registered a growth rate of 7.2% in FY23.2 Lower unemployment and a surge in net payroll additions under the EPFO signify a rise in employment in the corporate sector. The corporate sector’s credit-to-GDP ratio is still below its historical trend, which indicates that there is ample room for this sector to raise its debt burden. The corporate sectors high debt level has also been crucial for sustaining macroeconomic stability. Consistent domestic demand, particularly in private consumption, increasing gross fixed capital formation and the governments enhanced focus on capex have all contributed to this robust expansion. A historic budget estimate (BE) of H 10 lakh crore for FY24 was announced as part of the Union Budget 2023, which marked a 37.4% increase in the capital investment outlay3. The governments capital investments are anticipated to benefit the manufacturing sector of the economy by offering Indian goods a competitive edge in the global market. The Indian Government has several initiatives in the pipeline to strengthen the infrastructure sector in the next few years, whether it be roads, railways, aviation, shipping, or housing. Some of the initiatives taken by the Government include:

Japan and Indias vision for 2025 is for the two countries to collaborate to build quality infrastructure and improve regional connectivity. Japan also announced a 5 trillion yen (about USD 37 billion) investment in India over the next five years. 4

The Government targets operationalising 1000 routes, 50 additional airports, heliports and water aerodromes in the near future under the Ude Desh Ka Aam Nagrik (UDAN) scheme. 5

The vision of making India’s railway system ‘future-ready’ is to build capacity ahead of demand. This will help accommodate demand growth up to 2050.

The Central government’s projects, such as the Bharatmala project and the Gati Shakti master plan, will help achieving the objective of having 90% rural access by FY 2030 to enhance connectivity across the country.

2https://pib.gov.in/PressReleseDetailm.aspx?PRID=1928682 3https://pib.gov.in/PressReleasePage.aspx?PRID=1895279

4https://www.investindia.gov.in/team-india-blogs/india-japan-ties-boosting-cooperation-indo-pacific-defence 5https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1918622


Indias positioning as one of the fastest-growing major economies globally has played a pivotal role in strengthening its economic growth and stability. The countrys conducive domestic policy environment, coupled with the governments unwavering focus on structural reforms, has ensured robust economic activity even in the face of a challenging global outlook. In fact, India is expected to sustain its position as the fastest-growing nation among the G-20 countries in the coming years. FY23 for India started on a positive note with the country assuming the presidency of the G20 Summit this year. This prestigious role has significantly enhanced Indias international standing and garnered substantial attention from global stakeholders. Numerous international delegations have expressed keen interest in conducting business with India, recognising the countrys immense potential as a lucrative market for investment and trade. These corporations have demonstrated their willingness to collaborate with Indian businesses and actively participate in initiatives aimed at fostering economic growth, such as the Make in India and Digital India campaigns. Indias efforts towards innovation and entrepreneurship have been widely recognised globally and have received accolades from these delegations, praising the vast pool of skilled workers in the country and the favourable regulatory environment that facilitates business growth. The Indian governments policies, including the Atmanirbhar Bharat Abhiyan (Self-Reliant India Mission), have played a crucial role in the economic recovery. The governments initiatives to encourage infrastructure and productive capacity investments are also anticipated to lead to a multiplier effect that will enhance Indias potential for growth and job creation. The private sector was also instrumental in the recovery by making substantial investments in new technologies and infrastructure while expanding its workforce. All these factors have put the Indian economy on track to achieve its pre-pandemic growth rate. In fact, the International Monetary Fund (IMF) has projected that India will emerge as the fastest-growing major economy in the world in FY 2023.

India has made an impressive recovery from the pandemic-induced slowdown, and one major outcome has been a boost in business and consumer confidence. Indias ability to recover has instilled hope and optimism in the economy. The current economic growth is being driven by a stabilising inflation trajectory, rising disposable income, easy access to credit and lowering interest rates.

Industry overview

India’s infrastructure sector

The infrastructure sector, being a key driver and backbone of the Indian economy, is prioritised by the Government through huge capex investments and other initiatives. The infrastructure industry acts as a catalyst and facilitates the development of related industries such as townships, housing, urban infrastructure and development projects as well. The infrastructure industry will play an instrumental role in accomplishing India’s objective of becoming a five trillion-dollar economy. The Government, recognising the potential of this sector, has provided an enhanced impetus to it by rolling out several initiatives, including the National Infrastructure Pipeline (NIP), the Public-Private Partnership (PPP) model, the Production-Linked (PLI) initiatives and the Make in India scheme. In the past, over 80% of the funds allocated for infrastructure in India were typically directed towards transportation, electricity, water and irrigation. While these sectors are still significant and receive considerable government attention, other areas are now gaining prominence due to changes in Indias environment and demographics. It has now become even more crucial to build better infrastructure across all sectors—from housing and water and sanitation services to digitalandtransportationneeds—toensureeconomicgrowth, enhance the quality of life and encourage competitiveness across various sectors. The capital investment outlay for infrastructure is being raised by 33% to H 10 lakh crore (which is equivalent to USD 122 billion) in the Union Budget for the year 2023-24. This amount would constitute 3.3% of Indias GDP.6 As a consequence of this enhanced CAPEX, the infrastructure and quality of life are predicted to improve in both urban and rural areas.

Roads and highways

India has the worlds second-largest road network with a total length of 6.33 million kilometres. This comprises National Highways, Expressways, State Highways, Major District Roads, Other District Roads and Village Roads as under:

Road infrastructure

National Highways

1,44,955 km

State Highways

1,67,079 km

Other Roads

60,19,757 km


63,31,791 km


(Source: MoRTH Annual Report 2022-23)

Road transport plays a key role in promoting equal socioeconomic development across regions of the country, apart from facilitating the movement of goods and people. It has gradually increased over the years with improvements in connectivity between cities, towns and villages across the country.7 The market for roads and highways in India is expected to grow at a CAGR of 36.16% between 2016 and 2025, owing to favourable government programmes to upgrade the countrys transportation infrastructure.8 In terms of performance and innovation, Indias roads sector has been at the forefront. Based on the Hybrid Annuity Model (HAM), the Government of India has successfully implemented on many road projects with an aggregate length of 14,317 km which approximates 60% under Bharatmala Pariyojana. HAM has correctly balanced risk among private and public partners and increased Public-Private Partnership (PPP) engagement in the sector. 9 According to current road and highway statistics, NHs totalling 5,774 kilometres in length were built during the first nine months of FY2022-23.10 The NHAI has gone Fully Digital, with the debut of a unique cloud-based and AI-powered Big Data Analytics platform - Data Lake and Project Management Software, as one of the most significant reforms in Indias road transport business. All project documentation, contractual decisions and approvals are now completed solely through the site. The ease of processing and transparency in processes because of digitalisation will help India grow at a faster pace.

Government policies

The Government has been implementing several initiatives for the development of road infrastructure and transformed the landscape from commuting perspective. Some of the key initiatives are: BharatMala Pariyojana, which was announced in 2017, intends to construct around 65,000 kilometres of national and economic corridors, border and coastal roads and motorways to enhance the efficiency of existing highway infrastructure. The programme is expected to offer 4-lane connections to 550 districts, create 50 economic corridors totalling around 26,000 kilometres, boost vehicular speed by 20-25%, reduce supply chain costs by 5-6% and strengthen the NH network to transport 70-80% of total road traffic. The first phase of the initiative will build 34,800 kilometres of highway at a cost of H 6,92,32411 crore out of which 11,789 kilometres has been completed.

In addition to this, the NHAI intends to build 25,000 kilometres of national highways in 2022-23 averaging at a rate of 50 kilometres per day and has raised H 2850 crore through InvIT mode of which H 3900 crore is in the year 2022-23. In addition to this, to build world-class infrastructure, the Government has announced that the National Infrastructure Pipeline (NIP) will receive an investment of USD 275 billion in roads from 2019 to 2025.12 Gati Shakti scheme launched on October 13, 2021, is a digital platform that will bring 16 ministries, including railways and roadways, together for integrated planning and coordinated implementation of infrastructure connectivity projects for industrial clusters and economic nodes. The Government of India plans to invest nearly USD 1.2 trillion (H 100 lakh crore) in building a holistic infrastructure through Gati Shakti.13

The National Highways Interconnectivity Improvement Project is aimed at enhancing the highway infrastructure in the North-Eastern region of India. The project involves the development of two critical corridors - the East-West Corridor, which spans approximately 3,442 kilometres from Porbandar in Gujarat to Silchar in Assam and the North-South Corridor, which stretches for around 4000 kilometres from Srinagar in Jammu and Kashmir to Kanyakumari in Tamil Nadu.

The Setu Bandhan/Bharatam Scheme launched in 2016 is an ambitious programme with an investment of H 50,000 crore to build bridges for safe and seamless travel on National Highways. The Government has set a target of constructing 208 Road Over Bridges (ROBs) and Road Under Bridges (RUBs) at a cost of H 20,800 crore (USD 2.8 billion) under this scheme.14 The allocation of funds for FY 2022-23 under this scheme is H 1326 crore.15

Key policy measures to encourage private participation

The Government decided to leverage private sector expertise and resources to deliver projects more efficiently, effectively and at a lower cost than traditional procurement methods. The private sector brings its expertise in project management, financing and technology, while the Government provides regulatory oversight, public policy direction and often some form of financial support. This has gained popularity in recent years as the Government seeks to provide essential infrastructure and services to its citizens without relying solely on public funds.

Public-Private Partnership (PPP) model

This is a model of infrastructure development and service delivery that involves collaboration between the public and private sectors. Under the PPP model, the Government partners with private companies to finance, design, build, operate and maintain infrastructure projects such as highways, airports and power plants. The private sector brings in capital, technical expertise, and efficiency in operations, while the Government offers assistance through policies, regulatory frameworks and funding. The objective of PPP is to leverage the strengths of both sectors to deliver better-quality and more cost-effective public services.

Fast-tracking of project approvals

The Government has streamlined the project approval process for infrastructure projects to make it easier for private companies to invest in such projects. This includes setting up a single-window clearance system and reducing the number of approvals required.

Infrastructure Investment Trusts (InvITs)

InvITs are investment vehicles that pool money from investors and invest in infrastructure projects. The Government has introduced tax incentives for InvITs to encourage private investment in infrastructure development. NHAI has raised H 7350 crores in 2021-22 and H 2,850 crores in 2022-23 so far through InvIT mode.16

Viability Gap Funding (VGF)

The Government provides VGF to bridge the gap between the cost of a project and the revenue it generates. This helps make projects financially viable and attractive to private sector investors.

Tunnel infrastructure

Tunnel is one of the key segments of the Indian Infrastructure industry. In recent years it has gained more prominence by helping reduce travel time and making journeys safer. One of the most significant tunnel infrastructure projects in India is the Chenani-Nashri Tunnel, located in Jammu and Kashmir. Another notable tunnel project is the Rohtang Tunnel, located in Himachal Pradesh. The Mumbai-Pune Expressway is another significant infrastructure project that includes several tunnels. The Khandala Tunnel is the longest among them, with a length of 3.5 kilometres. It is a two-lane tunnel that passes through the Western Ghats, connecting Mumbai and Pune. The tunnels on the expressway have helped reduce travel time and made the journey safer for commuters. The Parwanoo-Solan tunnel involved the upgrade of an 89.7-kilometre, four-lane road in two sections, where the first section includes the upgrade of 38 kilometres of Parwanoo-Solan road and the second section includes the upgrade of 50 kilometres of Solan-Shimla road. It included the construction of 26 kilometres of new road stretch between Kaithlighat and Kufri-Mashobra junction near Shimla to cut short the arduous journey by 17 kilometres, an 825-metre one-way tunnel near Barog Bypass, two railway overbridges at Sanawar and Barog Bypass, and a flyover at Kumarhatti, reducing the distance by 3 kilometres. Apart from transportation, tunnel infrastructure is also important for water supply and power transmission. The Kishanganga Hydroelectric Project in Jammu and Kashmir includes a 23.65-kilometre-long tunnel that diverts water from the Kishanganga River to a power plant. The project generates 330 MW of electricity and supplies power to the northern states of Jammu and Kashmir, Punjab and Haryana.17

Railways and metros

The railway infrastructure in India is one of the largest in the world. Indian Railway is a state-owned organisation of the Ministry of Railways that operates over 67,000 kilometres of track and carries over 23 million passengers and 3 million tonnes of freight every day. The Indian Railways are the most widely used and preferred mode of transportation for most Indians when travelling across large distances due to its low costs and efficient operations. The railway network is also ideal for the movement of bulk commodities, apart from being an energy-efficient and economic mode of conveyance and transport. In 2020, a 2 km long train named Super Anaconda was run with 177 loaded wagons at an average speed of 40 Kmph, carrying approximately 15000 tons and thus created a history of carrying such a bulk quantity of coal at once.

Indian Railways achieved revenue of H 2.40 lakh crore in FY 2023, up from H 1.91 lakh crore in FY 2022, representing a 27.75% growth.18 The Indian Railways adopted the motto Hungry for Cargo to convey its commitment to offer reliable and effective freight transportation services. The Indian Railways, in accordance with its motto, has consistently worked to improve the ease of conducting business and the delivery of services at competitive prices, which has led to an increase in traffic on the railways from both conventional and non-conventional commodity streams. Cargo plays a critical role in driving economic growth and development in the nation. Indian Railways has been continuously upgrading its infrastructure to meet the ever growing demands of the country. In recent years, it has introduced state-of-the-art high-speed trains and signalling systems, to augment the efficiency and safety of its operations. The Government has also rolled out various initiatives to promote the use of renewable energy in the railway sector, such as installing solar panels on the rooftops of railway stations and using biofuels to power locomotives.

However, there are challenges that need to be addressed in the railway sector, such as overcrowding, delays and safety concerns. The Government is working towards addressing these concerns by investing in the modernisation of infrastructure and the development of new projects, such as dedicated freight corridors and high-speed rail networks. Overall, the railway infrastructure in India plays a crucial role in the countrys development, and it will continue to be a priority for the Government in the years ahead. To ensure that Indian Railways is growing every year a National Rail Plan (NRP) Vision 2024 has been launched for accelerated implementation of certain critical projects by 2024 such as 100% electrification, multi-tracking of congested routes, upgradation of speed to 160 kmph on Delhi-Howrah and Delhi-Mumbai routes, upgradation of speed to 130kmph on all other Golden Quadrilateral-Golden Diagonal (GQ/GD) routes and elimination of all Level Crossings on all GQ/GD route. The Indian Railways has identified 58 super critical projects of a total length of 3750 kms costing H 39,663 Crore and 68 Critical Projects of a total length of 6913 kms costing H 75,736 Crore by the end of FY 2024.

Government policies

National Rail Plan (NRP)

The Indian Railways has recently launched the National Rail Plan (NRP) 2030, which aims to create a futuristic railway system to improve passenger and freight services, reduce transit time, enhance network capacity and increase safety and sustainability.19

High-Speed Rail (HSR)

The Indian government has initiated the High-Speed Rail (HSR) project, also known as the Bullet Train project, which intends to create a high-speed rail network connecting major cities in India. The project involves the construction of a 508-kilometre-long high-speed rail line between Mumbai and Ahmedabad.20

Station Redevelopment Programme

The Indian Railways has also started the Station Redevelopment Programme to redevelop and modernise railway stations across the country. The programme includes the construction of new passenger amenities, better signage and lighting, enhanced security and improved accessibility.21

Electrification of the railways

The Indian government has set a target to electrify the entire Indian Railways railway network by 2023, which will reduce carbon emissions, save on fuel costs and improve the efficiency and reliability of the railways. The electrification of the railways will also lead to the phasing out of diesel locomotives.22

Metro Rail Projects

Several metro rail projects are currently ongoing in various cities across India, including Delhi, Mumbai, Bengaluru, Hyderabad and Chennai. These projects will help provide a fast, efficient and sustainable mode of urban transport while also reducing congestion on the roads.

Power transmission

Power transmission plays a crucial part in powering the nation’s growth and development. The industry has witnessed remarkable growth in recent years driven by factors such as rapid urbanization, industrialisation, increase in per capita income and Government’s initiatives to promote electrification across rural areas. The Government of India has implemented several policies and initiatives to support the industrys growth and enhance its competitiveness. These include the ‘Make in India’ campaign which aims to boost domestic manufacturing and various reforms to enhance efficiency and reliability.

According to the Central Electricity Authority (CEA), the installed transmission capacity in India has increased from 483,390 megawatts (MW) in March 2015 to 416058 MW in March 2023 of which 172010 come from renewable energy sources. This growth in transmission capacity has been driven by the expansion of the countrys power generation capacity and infrastructure.23 One of the key initiatives taken by the Indian government to enhance power transmission is the Green Energy Corridor project. This project aims to strengthen the countrys transmission network to facilitate the evacuation of renewable energy from power generation projects located in remote areas. This scheme, along with the GEC-Phase-I, which is already under implementation in the states of Andhra Pradesh, Gujarat, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Rajasthan and Tamil Nadu for grid integration and power evacuation of approximately 24 GW of RE power, is expected to be completed by 2022. The scheme is targeted to be set up at a total estimated cost of H 12,031.33 crore. The transmission systems will be created over a period of five years, from FY 2021-22 to FY 2025-26 and they will help achieve the target of 450 GW of installed RE capacity by 2030.24 The Indian power transmission sector has also witnessed significant private sector participation in recent years. Private companies are investing in the construction of transmission infrastructure through the tariff-based competitive bidding process, which has led to increased competition and efficiency in the sector. According to the CEA, private sector participation in the transmission sector has increased from 16% in March 2015 to 50% in March 2023.25

Government policies

A budgetary allocation of H 7,327 crore has been made in the Union Budget for the year 2023–2024 for the solar power sector including grid, off grid and PM KUSUM projects. Additionally, the government has announced issuance of sovereign green bonds to raise finances.

To meet India’s 500 GW renewable energy target and tackle the annual concern of coal demand-supply mismatch, the Ministry of Power has identified 81 thermal units that will replace coal with renewable energy generation by 2026.26

The Government declared the issuing of sovereign green bonds in the Union Budget 2022-23, as well as the designation of energy storage technologies, including grid-scale battery systems, as infrastructure.27 Electrification in the country is rising, thanks to programmes such as the Deen Dayal Upadhyay Gramme Jyoti Yojana (DDUGJY), the Ujwal DISCOM Assurance Yojana (UDAY) and the Integrated Power Development Scheme (IPDS).28 The Government of India approved the Revamped Distribution Sector Scheme (RDSS) to assist distribution companies (DISCOMs) in improving operational efficiencies and financial sustainability by providing them with result-based financial assistance. The scheme has an estimated outlay of H 3,03,758 crore over a five-year period, from FY 2021-22 to FY 2025-26. The budget includes an estimated H 97,631 crore in Government Budgetary Support (GBS).

Hydropower infrastructure

Hydroelectric power is an important source of renewable energy in India, with significant potential for future growth. According to the Central Electricity Authority (CEA), the installed transmission capacity in India is 416058 MW in March 2023 of which 172010 comes from renewable energy sources. The Indian government has been taking steps to promote the development of hydroelectric power, including improving the transmission infrastructure to evacuate power from hydroelectric projects located in remote areas.29 One of the key challenges in the transmission of hydroelectric power is the long distance between the generation sites and the load centres. The Indian government has been working to address this concern through the construction of new transmission lines and substations. For instance, the Government has proposed the construction of a 765 kV transmission line to evacuate power from the 2,880 MW Dibang hydroelectric project in Arunachal Pradesh.30 The Indian Government has also been taking steps to upgrade the existing transmission infrastructure to improve the reliability and efficiency of hydroelectric power transmission. For this, the Government has proposed the installation of Phasor Measurement Units (PMUs) in the transmission network to improve real-time monitoring of the network. The Government has also proposed the installation of High-Voltage Direct Current (HVDC) transmission lines to reduce transmission losses and improve the efficiency of hydroelectric power transmission.

Government initiatives

• On November 19, 2022, the Prime Minister of India dedicated the 600 MW Kameng Hydro Power Station in Arunachal Pradesh to the country. The project, which

Annual Report 2022-23

covers more than 80 kilometres and costs about H 8,200 crore (USD 1 billion), is located in Arunachal Pradeshs West Kameng District. 31

• In February 2022, Nepal and India agreed to form a Joint Hydro Development Committee to explore the possibility of viable hydropower projects.

Logistics infrastructure

In recent years, Indias logistics infrastructure has attracted considerable attention and investment as it remains inadequate to meet the countrys growth aspirations. If improvements are not made in a timely manner, the waste produced by inadequate logistical infrastructure is expected to increase. However, if addressed in an integrated and coordinated manner, almost half of this waste can be eliminated. Also, this will help lower Indias transportation fuel requirements by 15 to 20%.32 To address these challenges, an integrated approach is required, focusing on the development of rail and waterway networks, alongside roads. The Government has undertaken several initiatives, such as the Dedicated Freight Corridors (DFCs) and the Bharatmala project, aimed at improving connectivity and reducing transportation costs. These projects involve the construction of new highways, expressways and rail corridors, providing efficient transportation links between major industrial and consumption centres. The Government is at present focusing on four shifts: building an appropriate logistics network; ensuring flows on the appropriate modes of transport, including rail and coastal waterways; and developing tools for effective network utilisation, such as logistics parks and standardised containers and pallets. Additionally, optimising the use of existing assets and redirecting investment towards rail are crucial actions. By implementing these changes, coupled with the creation of a National Integrated Logistics Policy (NILP), focused national initiatives and an empowered cross-ministerial group, waste can be drastically decreased, energy efficiency can be increased and Indias logistics infrastructure can be improved.

Government initiatives

Multi-Modal Logistics Parks (MMLPs)

• The PM Gati Shakti National Master Plan (NMP) is designed to facilitate the development of multi-modal connectivity infrastructure catering to diverse economic zones, including the Ports and shipping sector. Within the scope of the PM Gati Shakti initiative, a total of 101 projects pertaining to ports and shipping have been identified, amounting to a cumulative value of H 60,872 Crores for implementation.33 In line with this, endeavour

the Government of India has mandated MoRT&H to develop 35 MMLPs, out of which 3 projects (Bangalore, Chennai and Indore) has been awarded to various Bidders.34

• The MMLP at Indore has been awarded to G R Infraprojects Limited and is set to be constructed on area of 255.17 acres near Pithampur in the Dhar district of Madhya Pradesh. The estimated total cost of the project amounts to H 1110.58 Crore. The development of this project will be in PPP (Public-Private Partnership) model under the DBFOT (Design, Build, Finance, Operate, and Transfer) framework.

• G R Infraprojects Limited, has been selected to undertake the project with a Concession Period of 45 years, during which the Company will be responsible for the development and operation of the MMLP. The estimated cost for Phase-I development is H 758.10 Crore. The construction will be carried out in three phases, with the target completion date for Phase-I set to be achieved within 2 years, by the year 2025, leading to the commencement of commercial operations.35


• Government Infrastructure Projects: The Indian government has announced several infrastructure projects, including the Bharatmala Pariyojana, the Sagarmala project and the National Highways Development Project. These projects will require significant investments in infrastructure and these opportunities need to be capitalised on by winning contracts for construction, operation and maintenance.

• Increased Private Sector Participation: The Indian Government has been actively encouraging private sector participation in the infrastructure industry through various policy measures. This has led to an increase in private investments in areas such as infra development of roads, ports, airports and increased focus on renewable energy.

• Infrastructure Development in Tier-II and Tier-III Cities: The Indian Government is focusing on developing infrastructure in smaller cities and towns, which presents significant opportunities for investors and businesses. This includes investments in areas such as affordable housing, access to clean water, sanitation and healthcare.

• Increased Investment in Digital Infrastructure: The Indian government has launched several initiatives to promote the development of digital infrastructure, including the Digital India programme. This has led to a surge in investment in areas such as broadband connectivity, data centres and e-commerce.

• Emerging Markets: With the growth of the Indian economy, there is a rising demand for infrastructure development in smaller towns and cities. This can be leveraged by expanding of operations to emerging markets and offering its services in these regions.

• Focus on new models of operations: Hybrid Annuity Mode (HAM), Toll Operate and Transfer and Operate Maintain and Transfer, Engineering, Procurement and Construction (EPC) are some of the new models gaining prominence. The Engineering, Procurement and Construction (EPC) model is becoming increasingly popular in the construction industry due to its efficiency and cost-effectiveness. The Company has already secured several EPC contracts and this trend is expected to continue, providing significant opportunities for growth. The Company has also secured few HAM and BOT model based projects which gives future growth opportunities to the Company.

• Embracing technology: With technological advancements, the construction industry is rapidly changing and companies that embrace technology can gain an early mover advantage. The Company implements advanced digital solutions and leverages cutting-edge tools to enhance project management, improve operational efficiency and drive innovation in infrastructure development. The Company also incorporates the latest technologies such as Artificial Intelligence (AI), Internet of things (IoT) and data analytics to optimise construction processes, enhance safety measures and deliver sustainable and futuristic infrastructure solutions.

• Sustainability: There is a growing preference for sustainable infrastructure and companies that adopt environment-friendly practices can gain a competitive advantage. The Company can profit from this trend by incorporating sustainable practices into its operations, such as using renewable energy sources, reducing waste and improving energy efficiency.


Project complexity and risk Management

Infrastructure projects are often extensive and complex, involving multiple stakeholders, intricate logistics and various risks. Effective project management, risk assessment and mitigation strategies are critical to ensuring successful and timely project execution.

Urbanisation and population growth

Rapid urbanisation and growing population place further strain existing infrastructure systems. Meeting the demand for transportation, housing, utilities, and other critical services necessitates careful planning and resource allocation.

Political and policy uncertainty

Changes in government policies, regulations and political scenarios can impact infrastructure projects. Political stability and favourable long-term policies are crucial for attracting investments and ensuring project continuity.

Funding and investments

It is challenging to secure adequate financing for infrastructure projects. Infrastructure development is often impeded by limited public funds, overlapping priorities and difficulties in attracting private investment.

Regulatory and approval processes

Infrastructure projects often face complex regulatory frameworks and lengthy approval processes. Navigating through various approvals and complying with environmental and land acquisition regulations can cause delays and raise project costs.

Sustainability and climate change

Building infrastructure that is resilient to climate change and environment-friendly is a growing concern. The industry must address challenges pertaining to reducing carbon emissions, adapting to extreme weather events and implementing sustainable construction practices.

Stakeholder Engagement

Infrastructure projects involve numerous stakeholders, including communities, local authorities, environmental groups and businesses. Balancing diverse interests, addressing concerns and maintaining effective communication throughout the project lifecycle is a major challenge.


India has to focus on enhancing its infrastructure to reach its year 2025 economic growth target of USD 5 trillion. To this end, the Government has set a target to invest USD 1.8 trillion in infrastructure over the next five years. The Indian government also intends to modernise the countrys infrastructure network while creating numerous job opportunities.36 In the years ahead, the government is expected to focus more on transportation infrastructure. The Government plans include building new highways, railways and airports as well as modernising existing ones. The Government is investing heavily in the development of metro rail systems in major cities, with plans to have metro rail systems in 25 cities by 2025.37 This is expected to enhance transportation efficiency and reduce traffic congestion. Another focus area is energy infrastructure, with the Government striving to increase the generation of renewable energy. This includes investments in solar, wind, hydroelectric and nuclear power. The Government is also investing in the development of water and sanitation infrastructure, digital infrastructure and affordable housing.

Company overview

G R Infraprojects is an Indian infrastructure company that has been contributing to the development of the nations infrastructure for over two decades. The Company specialises in the construction and maintenance of roads, bridges, highways and other civil infrastructure projects. It has a strong presence in northern and central India and has expanded its operations to the western and southern regions as well. Owing to innovation and digitalisation, enhanced project models have developed, including the engineering, procurement and construction (EPC) model and the build, operate and transfer (BOT) model. Very few companies have explored these models and G R Infraprojects is one of them. Applying these models to the Company’s new projects has provided it with a competitive edge. The Company offers end-to-end solutions to clients, from project planning and design to construction and ongoing maintenance. It has a diversified project portfolio that includes the construction of, railway overbridges, elevated metro line, transmission lines, multi-modal logistics parks and ropeways. The Companys operations are divided into two main divisions, namely construction and manufacturing. The construction division is responsible for the execution of infrastructure projects, while the manufacturing division is engaged in the processing of bitumen, thermoplastic road-marking paint and road signage. The Company also has a fabrication and galvanisation unit for metal crash barriers. In recent years, the Company has been focused on expanding its operations and strengthening its presence in untapped markets. The Company has engaged in joint ventures and partnerships to pursue new projects and expand its market presence. It has also invested in research and development to improve its product offerings and enhance the quality of its services. G R Infraprojects has a strong financial track record, with consistent revenue growth over the years. In the fiscal year 2022-23, the Company reported a revenue of H 8,14,758.83 lakhs, a growth of 2.88 % compared to FY 2021-2022. The Companys net profit for the same period was H 85,176.80 lakhs, a growth of 11.95 % compared to FY 2021-2022. The Company has established itself as a reliable and efficient infrastructure company in India. Its focus on quality, safety and timely delivery of projects has helped it earn the trust of clients and investors alike. With the governments push towards infrastructure development and the Companys expansion plans, it is in a sweet spot to continue its growth trajectory in the coming years.

Financial overview and operational overview

Order inflow and order book

As of March 31, 2023, the Companys order book stands at H 26,780 Crores. During FY23, the Companys strategic focus was on diversifying its business operations. It successfully secured various projects, including 1 Multi-Modal Logistic Park valued at H 758 crores, 7 road projects under the HAM (Hybrid Annuity Model) worth H 6,550 crores, 2 ropeway projects valued at H 3,613 crores, and 2 tunneling projects worth H 4,135 crores, catering to hydro and railway sectors. The Company is awaiting the formal issuance of the letter of award for the ropeway and tunneling projects related to hydro. These recent successful bids have facilitated the Companys expansion into the ropeway, tunneling, and Multi-Modal Logistic Park business segments.


Revenue from operations

The Companys revenue from operations witnessed significant growth, reaching H 9,48,151.49 lakhs during FY 2022-23, compared to H 8,45,834.76 lakhs in FY 2021-22, indicating a substantial increase of 12.10%. The growth was mainly driven by increase in revenue from sale of services, increase in finance income on service concession receivables and increase in other operating revenue.

Other income

The other income experienced a significant rise of 31.04%, reaching H 8,729.52 lakhs during FY 2022-23, compared to the amount of H 6,661.79 lakhs recorded in FY 2021-22.

Total expenses

Our total expenses increased by 2.58% to H 7,61,647.51 lakhs in FY 2022-23 from H 7,42,479.26 lakhs in FY 2021-22. This was due to an increase in Construction expenses, employee benefits expense, finance costs, and other expenses. This was partially offset by a reduction in changes in inventories of finished goods and trading goods, cost of materials consumed and depreciation and amortisation expense. The expenses related to employee benefits witnessed a growth of 10.36% in FY 2022-23, reaching H 64,770.61 lakhs, as compared to H 58,688.99 lakhs recorded in FY 2021-22. This increase can be attributed to higher expenditures in areas such as salaries, wages, contributions to gratuity, provident fund, other funds, and staff welfare expenses.

Depreciation and amortisation

Depreciation and amortisation expense stood at H 24,565.16 lakhs in FY 2022-23, a decrease of 12.78%, from H 28,163.01 lakhs in FY 2021-22.

Finance cost

Finance costs increased by 5.41%, to H 44,301.10 lakhs in FY 2022-23 from H 42,025.82 lakhs in FY 2021-22. This was mainly due to increase in borrowings of subsidiaries.

Profit after tax

The profit after tax demonstrated a substantial surge of 74.83% in FY 2022-23, reaching H 1,45,442.68 lakhs, as compared to the amount of H 83,191.35 lakhs achieved in FY 2021-22 due to other factors stated above.

Earnings per share

Earnings per share for the FY 2022-23 stood at H 150.42 as compared to H 86.04 during FY 2021-22.

Net worth, capital employed and returns

The net worth of the shareholders stood at H 6,26,513.36 lakhs as at 31st March 2023 as compared to H 4,81,086.67 lakhs as at 31st March 2022.

Capital employed increased to H 12,20,166.79 lakhs as at 31st March 2023 as compared to H 10,16,209.95 lakhs as at 31st March 2022.

Return on equity for the FY 2022-2023 increased to 26.78% as compared to 19.28% in FY 2021-2022.

Liquidity and gearing

Cash and cash equivalents balances decreased to H 21,119.75 lakhs in the FY 2022-23 as compared to H 60,385.18 lakhs in FY 2021-2022.

Adjusted Net debt to equity ratio has decreased to 0.87 times as at 31st March 2023 as compared to 0.97 times as at 31st March 2022.

The total borrowings as at 31st March 2023 stood at H 567,897.73 lakhs as compared to H 5,25,053.65 lakhs as at 31st March 2022.


Revenue from operations

The revenue from operations grew to H 8,14,758.83 lakhs in FY 2022-23 from H 7,91,917.53 lakhs in the FY 2021-22, recording an increase of 2.88%. This growth was largely driven by increase in revenue from sale of services and increase in other operating revenue.

Other income

The Companys other income increased to H 18,090.08 lakhs in FY 2022-23 from H 13,240.21 lakhs in FY 2021-22, an increase of 36.63%.

Total expenses

The Company’s total expenses increased by 1.93% to H 7,18,237.38 lakhs in FY 2022-23 from H 7,04,661.74 lakhs in FY 2021-22. This was due to an increase in construction expenses, employee benefits expense and other expenses. This was partially offset by a reduction in changes in inventories of finished goods and trading goods, cost of materials consumed, finance cost and depreciation and amortisation expense.

The expenses related to employee benefits witnessed a growth of 10.37% in FY 2022-23, reaching H 64,724.83 lakhs, as compared to H 58,641.57 lakhs recorded in FY 2021-22. This increase can be attributed to higher expenditures in areas such as salaries, wages, contributions to gratuity, provident fund, other funds, and staff welfare expenses.

Depreciation and amortisation

Depreciation and amortisation expense stood at H 24,565.16 lakhs in FY 2022-23, decrease of 12.78%, from H 28,163.01 lakhs in FY 2021-22.

Finance cost

Finance costs decreased by 19.43 %, to H 10,222.03 lakhs in FY 2022-23 from H 12,686.69 lakhs in FY 2021-22. This was due to decrease in interest on bank borrowings, interest on debentures, interest on lease liabilities and other borrowing cost.

Profit after tax

Profit after tax increased by 11.95% to H 85,176.80 lakhs in FY 2022-23 from H 76,081.54 lakhs in FY 2021-22 due to other factors stated above.

Earnings per share

Earnings per share (EPS) for FY 2022-23 stood at H 88.09 as compared to H 78.69 in FY 2021-22.

Net worth, capital employed and returns

The net worth of the shareholders stood at H 5,21,516.11 lakhs as at 31st March 2023 as compared to 4,36,355.30 lakhs as at 31st March 2022.

Capital employed increased to H 6,22,045.04 lakhs as at 31st March 2023 as compared to H 541,012.32 lakhs as at 31st March 2022.

Return on equity for the FY 2022-23 decreased to 18.19% as compared to 19.49% in FY 2021-2022.

Liquidity and gearing

Cash and cash equivalents balances decreased to H 10,098.45 lakhs in the FY 2022-23 as compared to H 10,858.64 lakhs in FY 2021-2022.

Adjusted Net debt to equity ratio has decreased to 0.19 times as at 31st March 2023, as compared to 0.23 times as at 31st March 2022.

The total borrowings as at 31st March 2023 stood at H 107,588.01 lakhs as compared to H 110,198.62 lakhs as at 31st March 2022.

Key financial ratios for FY 2022-23




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Human capital

G R Infraprojects considers its people as its most valuable asset. The Company invests in building a formidable talent pool team comprising exceptional professionals. Over the years, the Company has been nurturing a meritocratic, empowering and caring culture that encourages excellence. The Company nurtures talents by providing its people with numerous opportunities to further enhance their capabilities. It encourages innovation, lateral thinking and multi-skilling and prepares its people for future leadership roles. As of 31st March 2023, the Company had 16,000+ employees. It undertakes selective and need-based recruitment every year to maintain the size of its workforce. Also, it aids the development of its employees by conducting several technical seminars and training. The Company’s people policies are aimed towards recruiting the right talent, facilitating the integration of its employees into the Company and encouraging the development of their skills to support organisational growth.

Sustainability and Corporate Social Responsibility

As a responsible corporate entity, the Company recognises how crucial sustainability is to ensure long-term success. In line with this, the Company has incorporated sustainable practices into all its business operations. The Company is cognisant of its environmental footprint and has implemented various measures to reduce it. Some of the Company’s sustainability initiatives include:

• The Company is mindful of the role that fossil fuels play in contributing to climate change. Therefore, it has invested in renewable energy sources such as solar power. The Company’s solar panels constitute a sizeable portion of our energy mix. Going forward, the Company intends to continue investing in renewable energy sources to reduce its dependence on fossil fuels.

• Waste management is an essential part of the Company’s sustainability efforts. It ensures that the Company disposes of waste responsibly. To this end, the Company has implemented recycling programmes to minimise the waste generated from its operations.

• The Company has installed water-efficient fixtures in its buildings and it recycles the water used in its operations.

G R Infraprojects recognises that its success is tied to the success of the communities it operates in. Therefore, it prioritises community support initiatives to ensure that it gives back to the communities. Some of the community support initiatives implemented by the Company include:

• Believing that education is critical to the success of any community, the Company has implemented education support initiatives to provide access to education to underprivileged children. Some of them are the Primary School at Bahadurpur, Ujjaina, the Gyan Mandir Samiti and the Sri Prakhar Paropkar Mission.

• Recognising the importance of healthcare in the well-being of communities, the Company has undertaken several healthcare support measures to make healthcare accessible to underprivileged communities. The Company has built hospitals and clinics and provided medical resources to ensure that people in the communities have access to quality healthcare.

Quality management

The Company endeavours to ensure that it meets stringent quality standards at all stages of a project. It aims to reduce cost sand cycle times through optimised resource utilisation. The Company has a team of engineers and professionals responsible for maintaining quality standards. During the execution stage, the Company tracks and tests all materials for conformity, identifies nonconformities and makes amends, as necessary.

Risks and concerns

To safeguard the interests of its stakeholders, the Company has implemented a comprehensive Risk Management framework to identify, analyse and mitigate business risks. The Companys Risk Management framework focuses on ensuring that risks are recognised and addressed in a timely and reasonable manner from a top-down to the bottom-up approach and is kept flexible to adapt to changing business needs.

Mentioned below are a few risks identified by the Company along with the mitigation measures implemented:


Risk definition

Risk mitigation measures

Project execution

This is the risk that the Company faces while executing projects, which could affect operational efficiency and result in delays.

To mitigate this risk, the Company has an experienced management team, project management systems and a well-defined project execution plan.

risk Disruptions of operation risks

This is the risk that arises due to supply chain disruptions, dependency on sub-contractors and the unavailability of plant and equipment.

To assure the availability of plant and equipment, vital materials, cutting-edge technologies, best-in-class supplier assessment, contracting and performance, the company has implemented a backward integration strategy and assessment techniques to prevent supply chain disruptions.

Regulatory risk

The infrastructure sector is highly regulated and changes in existing rules and regulations can impact the Companys operations.

To mitigate this risk, the Company has a strong regulatory and compliance team that keeps track of changes in regulations and ensures that the Company complies with them.

Counterparty or Fraud risk

The Company is exposed to counterparty risk, which occurs when a party fails to fulfil its contractual obligations.

To mitigate this risk, the Company conducts due diligence on its partners and suppliers. It also has a robust contract management system in place and it assesses the fraud risks to identify loopholes. The Company has put in place several rules, SOPs, controls relating to IT systems and a code of conduct, among other measures, to address these risks. Additionally, the Company has internal auditing procedures for various processes and IT systems that are designed to deal with these risks.

Geographical risk

The infrastructure sector is highly dependent on government policies and decisions, which can be unpredictable.

To this end, the Company has put in place risk-mitigation techniques to conduct thorough risk assessments of each site, solid manpower planning, site mobilisation and demobilisation standard operating procedures, and a compliance checklist.

Economic risk

The infrastructure sector is sensitive to economic conditions, such as changes in interest rates, inflation and GDP growth.

To address this risk, the Company has a well-diversified project portfolio across sectors and regions, which reduces its exposure to potential economic shocks.

Currency risk

Changes in the value of Indian rupee relative to other currencies could impact the Company’s revenues, cost and overall profitability.

The Company uses a hedging strategies to mitigate the currency risk.


Information technology

The Company operating in the dynamic EPC sector has incorporated advanced technology to enhance its operations. This includes the adoption of innovative technology such as artificial intelligence (AI), machine learning, the Internet of Things, data analytics, and effective data security tools. The in-house IT team provides solutions that enable real-time online visibility of on-site contract labour, employees, material movements, project progress, construction quality, and progress. The Company also utilises AI-based facial recognition, surveillance systems, drone technology, and other innovative tools to improve its operations.

To facilitate the long-term value of data and informed business decisions, the Company centralised multiple data centres into security compliance data centres. Additionally, it implemented a click-based operation solution that automates employee expenditure, travel schedules, employee grievances, and project management. Robust ERP procedures act as a multidimensional support system, and an efficient business intelligence (BI) decision-making system is in place to enable click-based visibility of quality data for rapid decision-making across departments.

It also uses business automation software, which enables the rapid flow of information across project locations. It is implementing several security solutions and innovative design tools. A Delivery Control Command Centre helps monitor machines and vehicles, prevent fuel waste, and eliminate the risk of theft.

Environment, health and safety

The Company is committed to implementing globally recognised best practices and complying with all applicable health, safety, and environmental regulations in all its operations. The Company ensures compliance with all occupational health and safety laws, regulations, and contractual requirements concerning the health and safety of employees and subcontractors at project sites and manufacturing facilities. To ensure the efficient application of these practices and maintain a safe workplace, the Company has a code of conduct in place. It also provides appropriate training to employees to ensure they are equipped to handle their work safely.

Internal control systems and their adequacy

The Company’s system of internal policies and controls is commensurate with the size and nature of the business, ensuring its adherence to prevailing legal and corporate governance norms as well as strategic and financial objectives and providing reasonable assurance against the same. A key element of this includes encouraging employees to adopt compliant and ethical practices. The system is also regularly reviewed and updated by the Board of Directors to ensure its relevance and comprehensiveness.

Cautionary statement

Statements in this document or discussion relating to future status, events, or circumstances, including but not limited to statements describing the Company’s objectives, projections, estimates and expectations, may be ‘forward-looking statements’ within the meaning of applicable laws and regulations. Such statements are subject to numerous risks and uncertainties and are not necessarily predictive of future results. Actual results may differ materially from those expressed or implied in the statements. Crucial factors that could make a difference to the Company’s operations include economic conditions affecting demand and supply and price conditions in the market in which the Company operates, changes in government regulations, tax laws and other statutes and other incidental factors.