Tantia Constructions Limited (Under CIRP)
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Tantia Constructions Limited (Under CIRP) May 2019 Company Teaser Tantia Constructions Ltd (In CIRP) © 2019 Grant Thornton RSPL. All rights reserved Version 1.1 dated 23-05-2019 1 Contents Sl No. Title Slide No. 1 Key Business Highlights 3 2 Industry Overview 4 - 8 3 Business Overview 9 - 17 Clientele Base Sector Overview • Railway Infrastructure • Bridges, Flyovers & Tunnels • Roads & Highways • Power Transmission & Aviation Infrastructure • Marine & Urban Infrastructure 4 Historical Financial Statements 18 - 20 Company Teaser Tantia Constructions Ltd (In CIRP) © 2019 Grant Thornton RSPL. All rights reserved Version 1.1 dated 23-05-2019 2 Key Business Highlights Unique profile of the company * The Company is operating in a competitive market but its credentials, capability and decades of experience sets it apart from its competitors. * Today it is one of the leading civil engineering construction companies in Eastern India with diverse and successful project portfolio. * It was one of the first Indian companies to be accredited for ISO 9001:2008 from DNV, the Netherlands for civil, steel structural and building projects. Company’s credentials is its strength * Tantia established its credentials in the field of construction, widening, conversion, maintenance, strengthening and beautification of roadways, road bridges, highways and layovers. * The company’s Urban Infrastructure Division has established its credentials through a presence in Kolkata improvement projects, Tantia its expertise comprising soil re-engineering, mechanized earthwork, hauling for large-scale land development, allied works of roads Constructions and pipelines, electrification and lighting systems. Robust industry dynamics serves as a tailwind to traffic growth Limited * Strong volume growth in automobile traffic –with four wheeler passenger vehicles outstripping two wheeler vehicular growth has led to an increased demand for quality road assets (TCL) * Freight transport market is expected to grow at a CAGR of ~13% till 2020 thereby continuing to be a demand driver for Capability to offer end-to-end solutions for railway projects *Tantia Constructions is today one of the oldest railway contractors in India with the experience of having completed assignments across diverse terrains for Eastern Railway, North Eastern Railway, South Eastern Railway and Northeast Frontier Railway. *The Company enjoys a pre-qualification for projects up to INR 450 crore when engaged in international joint ventures Diversified portfolio having a pan India presence * Coverage across 14 states in India and other 3 Indian neighboring countries helps reduce dependencies on select state economies * Healthy mix of different civil sectors like roads, railways, bridges, urban infrastructure development, power transmission, aviation infrastructure, marine infrastructure, tunnels construction, industrial construction and at times, construction of turnkey projects. Company Teaser Tantia Constructions Ltd (In CIRP) © 2019 Grant Thornton RSPL. All rights reserved Version 1.1 dated 23-05-2019 3 INDUSTRY OVERVIEW TANTIA CONSTRUCTIONS LIMITED (TCL) – UNDER CIRP Company Teaser Version 1.1 dated 23-05-2019 Tantia Constructions Ltd (In CIRP) 4 Indian Economy Real GDP growth 7.4% 8.2% 7.4% 7.8% 6.4% 7.1% 6.7% State of the economy • India is one of the important drivers of world growth. While the world economy grew by 3.2%, Indian economy expanded by 6.7% in 2017 2013 2014 2015 2016 2017 2018 E 2019 E • While the economy experienced major policy overhaul in GDP Growth & its Components (in %, Constant 2011-12 Prices, YoY) terms of demonetization and implementation of GST, the Q4 Q1 Q2 Q3 Q4 Components effects have been eased and benefits have emerged FY17 FY18 FY18 FY18 FY18 making India a stronger nation. Private Final Consumption 4.2% 6.9% 6.8% 5.9% 6.7% Expenditure • There has been a substantial improvement in GDP growth Government Final Consumption 22.5% 17.6% 3.8% 6.8% 16.8% to 7.7% in Q4 FY2018 from 6.1% in Q4 FY2017. the Exp. growth was led by pick up in Gross fixed capital Exports 7.0% 5.9% 6.8% 6.2% 3.6% formulation and private final consumption expenditure less Imports 6.6% 18.5% 10.0% 10.5% 10.9% offsetting the slowdown in growth of Government final Gross Fixed Capital Formation 6.0% 80.0% 6.1% 9.1% 14.4% consumption expenditure and exports. GDP 6.1% 5.6% 6.3% 7.0% 7.7% • The Index of Industrial production witnessed a rise to 4.6% Agriculture, Forestry and Fishing 7.1% 3.0% 2.6% 3.1% 4.5% in FY 2017 from a dip of 3.3% in FY 2016, led by an improvement in performance of all the sectors, namely Industry 5.0% 10.0% 6.1% 7.1% 8.8% mining, manufacturing and electricity. Services 6.3% 9.5% 6.8% 7.7% 7.7% GVA at Basic Prices 6.0% 5.6% 6.1% 6.6% 7.6% GVA ex-Agriculture 5.8% 6.0% 6.6% 7.5% 8.1% Company Teaser Tantia Constructions Ltd (In CIRP) © 2019 Grant Thornton RSPL. All rights reserved Version 1.1 dated 23-05-2019 5 Advantage India - Infrastructure • India is expected to become the third largest construction market globally by 2022 • India has a requirement of Investment worth INR 50 trillion (US$ 777.73 billion) in infrastructure by 2022 to have sustainable development in the country. • As on December 2018, infrastructure and capital good companies has seen a 30 per cent growth in order inflows from INR 2.05 trillion in Robust Demand 2017 (US$ 28.41 billion) to INR 2.67 trillion in 2018 (US$ 37 billion) • Development of world class infrastructure will lead to 9-10 per cent growth of Indian Economy • Increasing impetus to develop infrastructure in the country is attracting the major global players like China Harbour Engineering and Mizuho Financial Group • Construction Development sector and Infrastructure activities sector received FDI inflows amounting to US$ 24.87 billion and US$ 13.11 Increasing billion, respectively from April 2000 to June 2018. Investment • Infrastructure sector is one of the largest receivers of FDI inflows to India. • Favorable valuation and earnings outlook makes this sector an attractive opportunity. • Only 24 per cent of the National Highway network in India is four-lane, therefore there is immense scope for improvement. Attractive • The Regional Connectivity Scheme (RCS) gives opportunity for development of airports Opportunities • With initiatives like ‘Housing for All’ and ‘Smart Cities Mission’ the Government of India is working on reducing bottle necks and impeding growth in the infrastructure sector. INR 2.05 lakh crore (US$ 31.81 billion) will be invested in the smart cities mission. All 100 cities have been selected as of June 2018 Policy support • 100 per cent FDI is permitted under the automatic across various Infrastructure sectors Company Teaser Tantia Constructions Ltd (In CIRP) © 2019 Grant Thornton RSPL. All rights reserved Version 1.1 dated 23-05-2019 6 Growth in Infrastructure related activities • Infrastructure related activities witnessed strong growth during 2017-18 Growth in Infrastructure related • National highway construction recorded the highest increase of 20 per activities during 2017-18 (%) cent, in line with government’s increased focus on improving logistics. 25 • Freight traffic handled by Indian Railways increased by 5.58 per cent year-on-year during April-December 2018 (P) to 894.54 million tonnes while its gross earnings increased by 4.65 per cent year-on-year during 20 the same time. 20 • Cargo handled by major Indian ports increased by 4.83 per cent during April-November 2018. Electricity generation in the country increased by 15 4.74 per cent during April-December 2018. • Major ports reported a growth of 3.77 per cent and handled 518.6 million 10 tonnes of cargo during the period April to December 2018. • The eight core infrastructure industries include coal, crude oil, natural 8.1 gas, refinery products, fertilisers, steel, cement and electricity. 5 4.8 4.8 • The cumulative growth of the index was 4.3 per cent in 2017-18 and 5.1 4 percent year-on-year in April-November 2018. 0 • During 2017-18, growth in the index was led by cement (6.3 per cent), Electricity National Rail Frieght Railway Cargo at Generation Highway Traffic Earnings major port Steel (5.6 per cent), and electricity (5.2 per cent). Construction • In April-November 2018, the growth was driven by 14.2 per cent y-o-y Source: Economic Survey 2017, Ministry of Railways, Union Budget 2018-19, Indian Ports increase in cement production and 9.0 per cent y-o-y increase in coal Association, Central Electricity Authority production. Company Teaser Tantia Constructions Ltd (In CIRP) © 2019 Grant Thornton RSPL. All rights reserved Version 1.1 dated 23-05-2019 7 Opportunities in Infrastructure Government Initiatives International Associations Urban Indian Real Estate • The Government is making an attempt to • In June 2018, the Asian Infrastructure Investment • With every sixth urban person globally being revive and give boost to Public Private Bank (AIIB) has announced US $200 million an Indian, the real estate and construction Partnerships. investment in to the National Investment & sector holds significant opportunity for both • Forcreating an eco-system to make India a Infrastructure Fund (NIIF). global and domestic companies engaged global hub for electronics manufacturing a • Japanese investment has played significant role in across the value chain. provision of US$115.62 million in 2017-18 in India’s growth story. Japan has pledged • India will need to construct 43,000 houses incentive schemes like M-SIPS and EDF. investments of around US $35 billion for the every day until 2022 to achieve the vision of • Introduction of National Steel Policy in 2017 period of 2014-19 to boost India’s manufacturing Housing for All by 2022.