ADB To Lend $23 Million to GR Infraprojects Limited

ADB To Lend $23 Million to GR Infraprojects Limited 1

Bengaluru, NFAPost: GR Infraprojects Limited (GRIL), the Delhi-based infrastructure comany, received $23 million fund from the Asian Development Bank.

According to ADB, the Bank has signed an agreement to invest $23 million in Non-Convertible Debentures being issued by GR Infraprojects Limited (GRIL) to help the company rapidly scale up its construction of roads and highways in India through the purchase of new building equipment.

Vinod Aggarwal, managing director of GR Infraprojects, which is involved in EPC services for highways, flyovers, bridges, buildings and air-field development.
GR Infraprojects Limited (GRIL) Chairman and Managing Director Vinod Kumar Agarwal

This increased operational capacity will enhance GRIL’s ability to execute its existing orderbook and enable it to bid for more projects—thereby supporting the roads sector investment plans of the Government of India.

The agreement was signed by the Director General of ADB’s Private Sector Operations Department Michael Barrow and GRIL Chairman and Managing Director Vinod Kumar Agarwal at a ceremony in New Delhi.

Signing the agreement, Michael Barrow said supporting the growth of the transport sector is a key focus area of ADB’s private sector strategy in India. “We are pleased to provide long-term financing to GRIL, which will enable it to expand its execution capacity and allow it to bid for larger and more complex projects,” said Michael Barrow .

Incorporated in 1995, GRIL is one of the leading engineering, procurement, and construction companies in India, focused purely on the roads and highways sector. It has grown rapidly, at a compounded annual growth rate of 44% over the last five years. It currently has an order book of $2.78 billion, which is to be executed over the next three years.

GRIL Chairman and Managing Director Vinod Kumar Agarwal said the company has always focused on constructing quality roads and highways since its inception. “We want to play a more prominent role in the highway construction space in India in the future, while maintaining our focus on good quality and responsible construction. We are pleased to be associated with ADB,” said Vinod Kumar Agarwal

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. In 2018, it made commitments of new loans and grants amounting to $21.6 billion. Established in 1966, it is owned by 68 members—49 from the region.

The Motilal Oswal Private Equity backed engineering, procurement and construction (EPC) services company is on high growth and plans to go for initial public offering (IPO) with a valuation of close to $2 billion. The PE fund owns a 10% stake in the company. GR Infraprojects is involved in infrastructure projects across around 15 states and has an employee strength of over 5000. The company has completed around 100 EPC projects since 2006.

According to company filing, GR Infraprojects Ltd total revenue stood at Rs 3,205 crore for the financial year 2016-17, as compared to a revenue of Rs 1,895.9 crore in the previous fiscal. GR Infraproject’s earnings before interest, taxes, depreciation and amortisation (Ebitda) increased to Rs699.5 crore in 2016-17, as against an Ebitda of Rs235.4 crore in the previous year.

The development comes at a time when government of India is going through massive game-plan to invest in infrastructure. The government in the recent budget has given priority for investment in the national highways programme so that it will help in creating network of highways grid for better connectivity.

Besides ambitious dedicated freight corridor (DFC) and overhauling of railway infrastructure with an investment of Rs 50 lakh crore between 2018 and 2030, the government is looking at Public Private Partnerships (PPP) for its other infrastructure projects like industrial corridors, Road corridor project  Bharatmala, port-linked industrialization plan  Sagarmala and aviation infrastructure schme UDAN. With a total investment target of Rs 80,250 crore for phase three of the Pradhan Mantri Gram Sadak Yojana the government plans to build 1,25,000 km of village roads. 

The Ministry of Finance had given the highest-ever budgetary support of Rs 83,016 crore to the highways sector in the interim budget earlier this year in February and Rs 64,587 crore for railways. The government decision has given a new direction for the infrastructure development in capacity building for the greater development of economy. This comes in the backdrop of involving private sector in a bigger way for long-term results.

Nirmala Sitharaman during the budget also emphasized on creation of Infrastructure development funds (IDFs), strengthening of bond market and improving relationships with global pension and sovereign funds to meet long-term investment requirements of the infrastructure sector.

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