News

Monday, april 12, 2021

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 Despite the Covid-19 pandemic, National Highway Construction Hits Record Highs in 2020-21. How did the plan pan out to be virtuous?  Centre approves Rs 1,210 crore highway projects in Uttarakhand: Gadkari  Factors thriving the augmentation in the infrastructure sector  NIIF may buy part of Ashoka’s road assets  Dwarka Expressway to re-imagine realty prospects in New Gurgaon  UPEIDA sets new record with Bundelkhand expressway  L&T bags solar project worth ₹7,000 crore in Saudi Arabia  Cement production falls 5.5% in February  Steel industry set to report record sales growth in Q4

News Despite the Covid-19 pandemic, National Highway Construction Hits Record Highs in 2020-21. How did the plan pan out to be virtuous? Inventive, April 12, 2021

As the Fiscal Year 2021 rolled out towards its ending, it finished on a high note as India topped the road construction projection for the year. The startling news turns out to be a sky-high prospectus for the commencement of the new fiscal year. The government’s confidence uplifted as they achieved the targets accomplished, even though the initial phases rescinded construction due to the nationwide lockdown. The Ministry of Road Transport and Authorities surpassed the targets for highway construction for the fiscal year 2021. MoRTH constructed about 13,000 Km of national highways during the financial year that ended on March 31. The progress in transportation will be the line-up of the next few years. The construction of the road network would see generative revenues for the government authorities. Thus it prospers the economy’s motive to reach the pre-pandemic levels of GDP Growth by FY22. The clock ticked, and the achievement got lauded as one of the most defining moments in the crumbling times. The progression was 11,000 km more than the target for the previous fiscal.

So what made the government go ahead with the plan so efficiently, the question of many intriguing political leaders across the Parliament. The slew of relief measures could be the dominant reason that the government exceeded its target. Despite the discordant state of affairs, the plan exhibited a reduction in cash conversion cycles which enhanced performance guarantees. Union Minister Nitin Gadkari said on Friday that India now holds the record for the fastest road construction. He hailed the achievements by India in just over a month. He claimed that India made it to the Guinness World Record by building a 2.5km four-lane concrete road within 24 hours. The government efforts like providing bank guarantees to contractors helped with steady cash flow. The injection of the cash flow enhanced the production capacity.

The stringent efforts behind the accomplishment of the aim

Over the past year, industries got coerced towards a complete shutdown, and it contracted the growth of the Indian economy. The state of affairs got the better of the Indian citizens, and there looked no signs of progress until August 2020. In the aftermath of the Covid-19 pandemic, the shutdown rescinded traveling across state road link networks. The government enlightened the vision of expanding the highway network across the Indian States. The government decided to revamp the formulation of milestone billing (45-75 days) to monthly billing and release of retention money or preliminary deposit when the work got executed.

Economic activities were under the cosh of the strictest lockdown across the world. The lockdown did not affect much of the construction-related services due to its occurrence around the monsoon season. The activities regarding groundwork do not have a lot to conspire during hefty precipitation periods. Gradually, the Indian economy gathered its tempo back from August to September. The timeframe became a bolstering period for the National Highway Authority of India. The officials started to hire contractors and assign them the consignment. Around 13,000 km got built over six months, which gets overseen as the swiftness scheme under any regime in India.

How did the Ministry manage to mitigate the effects of the lockdown and exceeded the fiscal target?

News

Road contractors were left astonished by the swiftness in the conversion of cash cycle by the Ministry and NHAI. It allowed them to make special arrangements to facilitate the return of labor. The instructions laid down by the Union Minister and National Authorities of India opened the pathway for many contractors. In February, Patel Infrastructure Limited, a contractor of the National Highway Authority of India(NHAI), created a world record by constructing the outlay of the four-lane highway within 24 hours. The progression was observed as an evolution in the thought process of the Ministry and the government. The goal that was far-fetched by a single contractor soon become the ambition of thousands of contractors across India. Cash Cycle acts as a simulator in the whole process, as without the guarantee of cash flow, the consignment does not move forward. The labor markets get disrupted as the cycle works on a daily promise of wages. Henceforth, the contractors with financial security behind them started the construction activities in full flow and exceeded the target for the Fiscal year 2021.

Another NHAI contractor completed a single lane of the four-lane highway stretch of 25.84 km being developed between on Solapur-Vijapur in 18 hours. The speculation around the deal was that the construction got the nod from a Hyderabad-based company IJM India. Nitin Gadkari, at a press briefing, hailed the efforts of the contractual workers. Around 500 contractual workers were working their socks off for this project. The next part of the article would enlighten you about how the vision got prosperity despite the difficult times.

Despite the economic activities put on hold, how come Modi’s government action plan falls in the perfect place?

Since the Modi Government came into power in May 2014, it has pivoted towards the highway sector. The average per-day figure for road construction has been around 25 km. The heavyweight funding in the borough has proved to be the roadmap of many success stories. What has changed over the past year, and how have figures set the world record of 36.4 km per day? The plight oversaw a roller-coasting ride that had more positive turns, and that’s why it turned out to be the most propelling improvisation in 2020.

Between 2014-15 and 2021-22, the overall expenditure on national highway construction has increased from Rs 38,867 crore to Rs 1,83,101 crore. The covid-19 pandemic was a significant obstacle in the process as the plan got put on hold. Road Secretary Giridhar Aramane reconciled the efforts of the contractual workers amid the uncertainty of the year ahead. He asserted that when the lockdown happened, the government was preparing policies for the upcoming FY 2021. Almost for two months, no construction took place at the sites. Overcoming obscurity became the talking point in the industry, and finally, they reap their rewards today.

NHAI

The writing of higher road transportation seized a throwback.

The sky-high construction rates got cited as the preamble of the previous NDA government. The precursory NDA rule was back in 2007 and led by Shri Atal Bihari Vajpayee. His government also sighted its primitive focus on upraising highway-related services. The foot didn’t go off the pedal, and the significance was seen in the outcome. The Modi Government’s action plan was remnant to the one amended in 2007, and it looked like the Prime Minister was following in the footsteps of the great politician. But what was unprecedentedly obvious is that both the

News personalities had different circumstances and charisma, and hence the impact they had on the Indian economy differs in results. In the latest storyline, whenever the Modi Government would hit a new low in the political disclosure by peddling misinformation of the existing Congress leaders, we would recall the time of the respected leader Vajpayee, who truly dignified his opponent and allowed dissent. Vajpayee’s stature was a magnifying one, and nobody could ever step in his shoes and fill the void. The real question is- has the recent accomplishment by the Modi government showcased the formula to carry Vajpayee’s legacy? The growing impromptus on the infrastructure industries have been in the highlights since the lockdown.

3951 km highways constructed in apr sept ministry

The Infrastructural Upswing in India, How was the Foresight Laid Down?

The government realized that India’s post-pandemic economic recovery would be led by splurging their finances on the infrastructure sector. The message got conveyed to the National Highway Authorities of India, and the contractual workers started the recruitment of capital resources indispensable for the colossal proposal. However, despite clocking the results of 36.4 km per day, it was presumably lower than the 40 km per day target set by Road Transport and Highway Minister Nitin Gadkari in 2017. Knowing about why there has been a linchpin on the infrastructure sector become indispensable.

The government had put gigantic infrastructure projects in place for better road connectivity across States. But is it justifiable when contrarily, the government reveals its assets to private powerhouses?

Railways Minister Piyush Goyal said that the nation could progress towards sustainable growth only when the public and the private sectors work together at the forefront. On the frontier, he claimed that the Railway Network would never get privatized but welcoming private investments on the other, a visible contradiction on the government’s part. The sizeable speed of road construction has become the benchmark for India’s infrastructure creation. The large conglomerates and several industries got weighed down by massive debt, and the onus of the infrastructure creation was solely the government’s responsibility. Despite the strict restrictions, the government eased down the policies for the game-changers of the markets. Hence they could deliberately lend their support towards highway construction.

THE CRITICAL ASPECTS THAT HELPED THE CENTRAL GOVERNMENT EXCEED ITS TARGET

The government’s promptness in clearing dues and making timely payments helped the construction’s cyclic movement to undergo smoothly. Facilitation of payments to the contractors helped contractors with better cash flow to finish projects on time. As the lockdown eased out, the traffic on national highways recovered to pre-pandemic levels. While the air and the rail networks remained sluggish, road transportation remained the only available public transport in India during the pandemic. The Ministry was able to ramp up the road infrastructure project ahead of the deadline. All the fund-related challenges of the contractors got addressed by the Ministry. The contractors, in turn, needed to mobilize construction workers to outline the project. The contractors stood firm on their stance to accomplish the government’s vision. The vision was to transform the picturesque of highway transportation.

News Union Minister Piyush Goyal insisted that it a colossal step in the futuristic demand for infrastructure in India. Following the success of the current infrastructure project, the Ministry of Road and Transportation decided to expand its targets for the forthcoming year. Although the pandemic had its toll on the infrastructure sector, the private sector stepped up and provided significant cash flow injections to enhance construction acceleration. The expectation by the citizens is to ease road transportation as the concerns mobbed up in traveling through air and railway channels. If transportation gets privatized in the foreseeable future, the private sector could handle all the mobilizations accordingly. But seeing the trends this year, it is less likely the government opts out of high stakes. The complicated factor is without the accessibility of private investment, the government could not fulfill such targets under any circumstances. ^ Top

Centre approves Rs 1,210 crore highway projects in Uttarakhand: Gadkari Construction Week Online, April 12, 2021

These include strengthening work of NH-309B on EPC mode

The Centre has approved 28 highway projects worth Rs 1,210.17 crore in Uttarakhand, union Minister Nitin Gadkari said. These projects are for building 231.04 kms of highways.

These include strengthening work of NH-309B on EPC mode in Uttarakhand under State PWD with a budget of Rs 48.19 crore.

Besides, "construction of Rudraprayag tunnel of length 900.30m including approaches and one major bridge on river Alaknanda connecting NH-107 (Old NH-109) to NH-07 (Old NH-58) on EPC mode in the state has been sanctioned under state PWD with a budget Rs 248.51 cr," Gadkari said.

The projects include rehabilitation and upgradation of Askot - Lipulekh on EPC basis for Phase- I under project Hirak of Border Roads Organisation (BRO) under the Bharatmala Pariyojna with a budget of Rs 603.92 crore. ^ Top

Factors thriving the augmentation in the infrastructure sector Construction Week Online, April 12, 2021

Infrastructure is an important sector for the overall development of any country. In India, it is considered as the backbone of the country’s economy. It integrates projects on a wider scale and reinforces its competitiveness on a global level. The infrastructural facilities such as roads, railways, metro rails, etc are required to potentially increase the productivity and smooth functioning of other business sectors in India.

According to the estimates of a recent report – India will require Rs 50 trillion ($777.73 billion) in infrastructure by 2022 for sustainable development in the country. It is also marking a

News myriad of opportunities for foreign investors to invest in the country’s infrastructure development. Furthermore, the estimates shared by the Department for Promotion of Industry and Internal Trade (DPIIT) suggest – FDIs in the construction development and infrastructure activities stood at $17.22 billion in September 2020.

According to the present market scenario, the Indian government plans to spend USD 1.4 trillion during 2019 – 2023 on infrastructure with an investment of USD 750 billion on railways infrastructure by 2030. On the other hand, the onset of the pandemic caused a intimidating situation in front of infrastructure companies to recover from an all-time low of the previous year. This requires an urgent need to come up with highly effective strategies to stimulate growth in the sector.

A massive capital inflow is capital intensive and requires for the successful completion of infrastructure projects. The most impactful strategy to stimulate growth in the sector is an effective deployment of capital resources by the government. As per the recent budget – the government has announced the allocation of about Rs 1.07 lakh cr to the Ministry of Railways and Rs 25,933 cr to the Department of Telecommunications for capital expenditure. The deployment of the allocated resources in the right way is expected to increase the number of tenders announced and completed. As a result, there will be a large number of projects and higher demand for infrastructure firms, accelerating the cashflows in the country. Moreover, if the time taken to fulfill contractual obligations is reduced than the present, the operations in the sector will proceed with swiftness.

Besides resource allocation, it is the need of the hour to introduce pan- India policies in the sector for standardization. Inter-departmental disparities tend to obstruct the progress of the projects significantly. This has been obvious in the telecom sector that possesses differentiated pricing by municipal corporations, for instance in Delhi. This becomes a huge detriment for the industry as a whole especially at the time when telecommunication is not a luxury, but a necessity. Thus, the sector needs a universal policy for smoother execution of projects and tenders.

Another big challenge faced by large infrastructure companies is the sourcing of raw materials such as steel. Earlier, the infrastructure companies were needed to procure steel from primary producers who charged a premium, therefore driving up costs for the industry as a whole. Recently, the ministry of steel released a clarification stating that the raw material can be procured from any producer. However, the implementation of such guidelines needs a great push in order to boost the industry’s growth by reducing the costof raw materials. Furthermore, the price fluctuations on raw materials tend to delay the completion of infrastructure projects while slowing down the entire sector’s growth. Providing relief on procurement of raw materials can result in accelerating the delivery of the projects, thereby, accelerating the growth of the sector.

Any sector that needs a strong push needs to identify the roadblocks and find a solution for its progress. In the infrastructure industry, one of the biggest roadblocks is incomplete projects. These are usually left for too long in the last stage of development and the completion of them would make way for new projects as well as provide support for them. This case is especially with physical infra projects such as roadways and railways. Focus on physical infrastructure projects will make the movement of resources easier and also provide aid to logistics.

News In the past three years, there has been a buzz around the development of smart cities in India. Expediting the process of project approvals can help the government fulfil the mission of smart cities, and alleviate infrastructural gridlock in tier 1 and tier 2 cities, where most of the population is concentrated. ^ Top

NIIF may buy part of Ashoka’s road assets Mint, April 12, 2021

The Centre expects private investments to the tune of ₹30,000 crore in 2021-22 in the highways sector under the hybrid annuity and build, operate and transfer models.

India’s quasi-sovereign wealth fund, the National Investment and Infrastructure Fund (NIIF), has emerged as the buyer of the hybrid annuity road assets of Ashoka Concessions Ltd for an equity value of around $100 million, said two people aware of the development on condition of anonymity.

Ashoka Concessions’ roads portfolio comprises 15 projects, including six operational toll assets under the build, operate, transfer (BOT) model, one operational BOT annuity project and eight under-construction hybrid annuity projects.

The proposed deal with NIIF is only for the hybrid annuity model (HAM) assets. EY is running the sales process for the highways infrastructure company.

Mint had reported that NIIF, Canada’s Brookfield Asset Management Inc. and Actis Llp had placed bids to buy Ashoka Concessions’ assets, in a potential deal that may have an equity value of around $350 million and an enterprise value of around $1.2 billion. The sale process for Ashoka Concessions has been in the works for a while. I Squared Capital-owned Cube Highways had also earlier shown interest in the road assets.

“NIIF is expected to acquire the HAM assets. This has been agreed upon and the sales purchase agreement (SPA) is expected to be signed shortly," said one of the two people mentioned above.

With $4.5 billion of equity capital commitments across its three funds, NIIF’s road projects platform in India with Canada’s Public Sector Pension Investment Board’s (PSP Investments) ROADIS plans to invest $2 billion in equity to acquire road assets in India.

“As per NIIF policy, we do not comment on market speculation and information gathered from third-party sources,’’ said an external spokesperson for NIIF in an emailed response. “As per our policy, we do not comment on market rumours or speculation," a PSP Investments spokesperson said in an emailed response.

Ashoka Buildcon Ltd has a 61% stake in Ashoka Concessions, while the remaining 39% is held by Macquarie Infrastructure and Real Assets (MIRA), one of the biggest foreign infrastructure investors in India. In 2012, Macquarie, through its first India-focused fund, had bought the stake for ₹800 crore. It had finalized the deal jointly with State Bank of India.

News When contacted, spokespersons for Brookfield, Macquarie and EY declined comment. Queries emailed to spokespersons of Ashoka Buildcon and Actis on Friday remained unanswered till press time.

The development comes at a time when passenger and commercial vehicle traffic has been on a rise significantly since covid-led restrictions were lifted. However, there are concerns over the second wave of coronavirus infections, with some states imposing curbs such as night curfews to contain the transmission of the virus, which in turn may derail the recovery.

The road transport and highways ministry had built 13,505km of national highways, or 37km per day, in FY21.

The government expects private investments of ₹30,000 crore in 2021-22 under the HAM and BOT models. ^ Top

Dwarka Expressway to re-imagine realty prospects in New Gurgaon Construction Week Online, April 12, 2021

The connectivity is set to go several notches higher with the inauguration of the first urban expressway in 2022

Bolstered by strategic connectivity and infrastructural developments, New Gurgaon has emerged as the realty hotspot over the past few years. The connectivity is set to go several notches higher with the inauguration of the first urban expressway- Dwarka Expressway in 2022. The 29-km expressway connects Dwarka, Delhi and Gurgaon. It is being built in four packages, out of which 18.9-kilometre is in Haryana, while the remaining 10.1-kilometre is in Delhi.

The 29km expressway will originate at Shiv-Murti on National Highway-8 and terminate near Kherki Daula Toll Plaza. The NH-8 currently ferries approximately three lakh passengers daily. The commissioning of this expressway will divert 60% of traffic from NH-8, thereby reducing congestion and minimizing air pollution. The project will also generate around 50,000 direct and induced employment opportunities.

Furthermore, with the inauguration of a cloverleaf interchange at the intersection of Central Peripheral Road (CPR) and Southern Peripheral Road (SPR), traffic will seamlessly move between the SPR and Dwarka Expressway, (also known as the Northern Peripheral Road (NPR), bypassing the Delhi-Gurugram Expressway (NH-48).

The project will also have a cascading effect on real estate in Delhi, Gurgaon and surrounding regions. Developers are optimistic that it will escalate property prices and accentuate realty prospects.

Krisumi Corporation, is first of its kind joint venture between Japanese firm Sumitomo and India's Krishna Group and is currently developing a 30- acre project on the 65- acre land parcel

News in Gurgaon. The project called Krisumi Waterfall Residences is located in Sector 36A, Gurgaon and has direct connectivity with Dwarka Expressway.

"Real estate value has been directly impacted by the infrastructure development. When work on Dwarka Expressway took off, the real estate market of Gurgaon entered a new phase. Since then it has been one of the most preferred residential destinations of NCR and continues to attract interest from both investors and end-users alike. We expect that the recent visit of Hon'ble Minister Shri Nitin Gadkari, to overview the progress of the Dwarka Expressway will bring confidence for completion of the construction work," Takahiro Yamazaki, co-CEO and director, Krisumi Corporation, India, said.

"Dwarka Expressway continues to be one of the major residential destinations in the Delhi-NCR. Located between the crossroads of Delhi and Gurgaon, Dwarka Expressway has emerged as the realty hotspot in Delhi-NCR. Its strategic location and excellent connectivity has made it a preferred destination for homebuyers. Due to its seamless connectivity from IGI, the location boasts of hassle free travel. Moreover, it is connected to Southern Peripheral Road, National Highway 8 and there onto areas of New Delhi. Several educational institutions, shopping complexes and hospitals are also located in the region boosting the social infrastructure. Hence the area is home to several world-class projects," said Pankaj Bansal, director, M3M.

Dwarka Expressway will comprise the four levels- the longest (3.6 km) and most expansive (8 lanes) urban road tunnel/ underpass, at-grade road, elevated flyover and a flyover above flyover. The cost of the project is estimated at Rs 8,662 crores. It is being developed as part of the Bharatmala project.

Bharatmala is the new umbrella program for the construction of highways across India, focusing on optimizing freight and passenger movement efficiency across the country. A total of 24,800 km of highway construction will be considered in Phase I that will be implemented from 2017-18 to 2021-22. ^ Top

UPEIDA sets new record with Bundelkhand expressway Construction Week Online, April 12, 2021

Completes more than 50% work in shortest possible time

Grit and endorsement can help complete any task at hand. A fine example of this is the way Awanish Kumar Awasthi, IAS, CEO of Uttar Pradesh Expressways Industrial Development Authority (UPEIDA) is marching ahead with multiple projects worth thousands of crores.

Strongly supported by Chief Minister Yogi Adityanath, Uttar Pradesh is perhaps the only state that has big ticket projects under execution. Moreover, the government and its bureaucrats toil to ensure timely or before time completion.

Awasthi says, "We have completed more than 50% of the work for Bundelkhand expressway which, when completed, will run to 296km. There are three aspects to this. We have companies that are working fast and guaranteed quality. An advantage we had here was that land was

News readily available and farmers sold their land readily to the authorities. Bundelkhand, per se, has ready natural materials that clinched the project's success. Consistency of soil meant fewer geological tests."

Executed by Ashoka Buildcon, Apco Infratech, Dilip Buildcon and Gawar Construction, works up to bituminous level has been completed in 140 km.

UPEIDA is also constructing three bridges across rivers - Yamuna, Betwa and Cane - with the bridge across tthe Yamuna river to see fastest completion. By July, the authorities will be ready to open one side of the bridge (6-8 months of overall construction) and the other side by December.

Interestingly, the expressway has saved the government Rs 1230 crore as the lowest bid was - 12.8% lower than the estimated cost. Overall, the estimated civil cost of the project is Rs 14709.71 crore (including land cost).

The expressway passes through the districts in UP’s part of Bundelkhand — Chitrakoot, Banda, Hamirpur, Mahoba, Jalaun, Etawah and Auraiya.

Currently, 97.56% clearing and grubbing work, 83.28% of earth work and 536 structures have been completed against 818 structures. The first milestone work of the Bundelkhand expressway was scheduled to be completed in June 2021, but was completed by February.

The construction of expressway will pave the way for all-round development of the entire state. The expressway will act as a catalyst for setting up of handloom industry, food processing units, storage plant, mandi and milk based industries.

The expressway will link Chitrakoot with the Agra-Lucknow expressway in Etawah, which in turn is linked to NCR through the state’s two operational expressways — 302km Lucknow-Agra Expressway and the 165km Yamuna Expressway. ^ Top

L&T bags solar project worth ₹7,000 crore in Saudi Arabia Mint, April 12, 2021

The project is considered the largest solar plant in that country

The renewables arm of Larsen & Toubro’s Power Transmission & Distribution business has secured a turnkey EPC contract worth ₹5,000-7,000 crore in Saudi Arabia.

The contract, was awarded by a consortium of ACWA Power and the Water and Electricity Holding Company, a subsidiary of the Public Investments Fund of Saudi Arabia, for Sudair Solar PV Project of 1.5 GW capacity.

The project is considered the largest solar plant in Saudi Arabia and is also one of the largest such plants in the world.

News The project coming up in Riyadh has a 30.8 square km land parcel available to install a total capacity of 1.5GW PV solar modules with associated single axial tracker and inverters.

Renewable energy The ambitions of Saudi Arabia’s National Renewable Energy Programme are on track. As part of the NREP, Sudair Solar PV Project is awarded to PIF and its partner, ACWA Power.

The project is part of the 70 per cent target capacity of 58.7 GW the Kingdom has assigned to the Public Investment Fund.

SN Subrahmanyan, Managing Director, Larsen & Toubro, said the company has over 2.1 GW of utility-scale solar projects commissioned and is also operating and maintaining several of them.

“We have a diversified renewable portfolio of 32 MW floating solar power plants, 135 MWH of battery energy storage projects, 500 micro grids and 14,000 solar water pumps, he added.

T Madhava Das, Whole-Time Director, L&T, said the company has been building efficient power transmission and distribution networks with modern substations and transmission lines in the region for over two decades. ^ Top

Cement production falls 5.5% in February Mint, April 12, 2021

Usually cement production is high during Q4 as construction activities are at its peak..

Slow pick-up in infrastructure projects and waning pent-up demand has led to a drop in production of cement in the country. During February, production fell by 5.5% compared with 5.8% decline in January 2021 and 7.8% increase in February 2020.

Usually cement production is high during Q4 as construction activities are at its peak.

"Cumulatively domestic cement production has fallen by 15.5% during 11M-FY21 compared with the 13% growth and 1.8% growth achieved during 11M-FY19 and 11M-FY20. Outbreak of the COVID-19 pandemic in the Indian sub-continent which forced the government to announce a nation-wide lockdown, 25th March 2020 onwards which had majorly affected the cumulative domestic cement production. The nationwide lockdown had come at the time when construction activities are at its peak," said Care Ratings in a release.

Capacity utilisation of domestic manufacturers has been around 52.4% during 11 months of FY21 as units have been operating at sub-par capacities along with staggered shifts, but it has been improving from 45% during first half of FY21, 49.5% during nine months to FY21 and 51.2% during 10 months to FY21.

Cement manufacturers had cut down or deferred capital expenditure given the fall in demand and also as companies looked to conserve their capital/cash flows but lately many of the players have been announcing expansion of capex guidance plans.

News

Cement demand is closely linked to the overall economic growth, particularly of the housing and infrastructure sector. Increasing demand from affordable housing and construction work for other government infrastructure projects like roads, metros, airports, irrigation etc. are demand drivers which support cement demand.

Amid the pandemic, cement consumption is growing in the rural, semi-urban and retail markets. Over the months, cement demand is being driven by rural India due to better labour availability; there has been an increase in construction of rural infrastructure and low-cost housing. Rural demand is usually with regard to the retail market largely which is the housing and repair and modification market). Now as the economy has unlocked, there has been a steady pick up in housing and government infrastructure projects which has resulted in reviving demand across our markets even in urban India.

Real estate markets in Tier-1 cities has been opening up and is garnering good traction with the advent of “work from home", consumers want to buy their own space or a larger space. ^ Top

Steel industry set to report record sales growth in Q4 Mint, April 12, 2021

Steel prices are expected to remain high in 2021, fuelled by higher demand, which will affect core inflation and also keep WPI inflation at elevated levels.

Revenues are expected to improve 45-50% y-o-y on higher realization and rising demand

Strong domestic demand, along with healthy exports, aided the steel industry’s production and sales growth in the fourth quarter of 2020-21 on a sequential basis, said analysts.

Revenues of steel companies are expected to improve 20% quarter-on-quarter and 45-50% from a year ago on higher realization and rising demand, led by a recovery in capital expenditure of states, auto production, white goods production and real estate construction.

“Steel companies are expected to post a whopping 45-50% y-o-y increase in revenue, led by rising realizations (27% y-o-y increase) and healthy demand in the fourth quarter of fiscal 2021 on the low base of last year (sales and production by steelmakers were impacted in the last two weeks of March 2020 due to the lockdown)," said Crisil Research in a report on 8 April.

The top five steel manufacturers—Tata Steel, JSW Steel, Steel Authority of India Ltd (SAIL), Jindal Steel & Power Ltd and AM/NS India (formerly Essar Steel)—account for about 55% of India’s installed capacity.

Domestic prices of flat steel are estimated to have increased 32% in the fourth quarter from the year-ago period and are expected to remain elevated over the coming months.

“Steel prices in the world are at an all-time unprecedented high due to steep increase in the prices of iron ore as well as due to the strong growth in steel demand from China, India, US,

News Europe and other emerging markets, as global markets recover from a year-long slowdown with the reopening of business activities and vaccination drive," according to a report by Care Ratings on 30 March.

Hot rolled coil (HRC) prices are expected to rise by at least ₹3,500- ₹4,000 per tonne in April 2021. A ₹4,000 a tonne hike will take domestic HRC prices to ₹59,000- ₹60,000 per tonne—the highest since 2008.

Firm international steel and iron ore prices, along with strong demand from China, US and Europe are driving international steel prices, and have prompted domestic steel makers to raise prices since H2FY21.

Levying of charges on BSBDA is guided by Sept 2013 RBI guidelines. As per the direction these accounts holders are ‘allowed more than four withdrawals’ in a month, at the bank’s discretion provided the bank does not charge for the same

However, while the upward movement in steel prices brings relief to domestic steel companies, it has spooked end-user sectors that are wary of the steep increase in raw material costs.

Besides, increase in steel prices also raises the fear of inflation in the domestic markets as rising raw material costs across sectors has a cascading effect on consumer spending.

Among the worst-hit sectors are automobiles and infrastructure. Construction and real estate accounts for 55-60% of total steel consumption, followed by automobiles, which accounts for 9%, and capital goods and consumer durables with a share of 8% and 6%, respectively.

Among the basic metals sub-groups, flat steel products, including HRC and CRC (cold rolled coil), which are primarily used in the automobile sector, have seen the sharpest rise.

“Most top automobile manufacturers are expected to take a second price hike in the range of 1 - 3% in April 2021 after having taken 3-4% hike this year, to offset impact of higher steel cost. The ministry of highways and construction has said that higher input cost can affect viability of some construction projects," added Care Ratings. ^ Top