Project business strategy for IRB Infra
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Transcript of Project business strategy for IRB Infra
Business Strategy
Presented By:
Swaroop Das Chowdhury (2013D04)
Subhashini N. (2013D17)
Company Profile:
IRB Group• IRB Infrastructure Developers Ltd. was incorporated in 1998 to fund the capital requirements of the IRB Group initiatives in the infrastructure sector.
• One of the leading Infrastructure Development company in India in road & highway sector
Focus Vertical• Undertake development of various infrastructure projects in the road sector through several SPVs.
• The company, along with its subsidiaries, has constructed or operated and maintained around 8,000 lane kms. of road length so far and one of the major road developers in the country
• The aggregate size of all their BOT projects (both completed and under execution) is around Rs. 170,552 Million.
•Hold market share of 11.07% on the golden quadrilateral
Strategic De-risking
• Greenfield Airport Projects • Develop Real Estate
The “IRB” Group
Roads
Engineering, construction and
wind power
Airport
Real estate
21 BOT projects
Modern road makers pvt. Ltd
IRB sindhudurg airport Pvt. Ltd
Aryan infrastructure investment pvt.ltd
Hospitality Aryan hospitality pvt.ltd
Key competitiv
e advantage
One of the largest BOT
project portfolio in
the roads and highways
sector
21 BOT projects out of which 16 are operational
Strong financial track
record and relationship with leading
financial institutions
Integrated and efficient
project execution
capabilities
Professionally managed
company with qualified and
skilled employee
base
Robust order book of Rs.
115873 mm
OPERATIONAL BOT PROJECTS NAME OF THE PROJECT PROJECT COST AS
APPRAISED BY THE LENDER(Rs.Mn)
Surat dahisar 25372
Bharuch surat 6736
Tumkar chitradurga 11420
Telegaon amravati 8800
Jaipur deoli 17330
Omallur salem namakkal 3076
Mumbai pune 13016
Name of the project
Project cost
Pathankot amritsar 14453
Ahmedabad vadodara 48800
Goa/ karnataka border to kundapur
26390
Solapur yedeshi Approx.15000
PROJECTS UNDER IMPLEMENTATION
Porter’s Five Force Model
Rivalry Determinates
– HIGHA high returns project attracts 13-15 bidders. Margins are to be sacrificed
Buyers Power: Primary – HIGH;
Secondary – LOWPrimary buyer (Govt.) has high bargaining power in this monopsonistic market. Secondary buyer (end user) is mandated by law to pay tolls.
Suppliers Power – MODERATE
Raw material suppliers have reasonable bargaining power whereas subcontractors have reduced power due to in-house construction capabilities of company.
Threat of New Entrants – MODERATE
Proven track record required for project execution. Strong technical and financial capabilities are also needed.
Threat of substitutes – MODERATE
Reach of railways restricted to span of its network. MRTS has limited infiltration and span.
BCG Matrix
Question Mark
Dog
Star
Cash Cow
Hig
her
Mark
et
Gro
wth
Higher Market Share
Airports, Real Estate, Wind Power
Roads, ECC
Hospitality
GE McKinsey Matrix
Investment and Growth
(Roads)
Selective Growth
(Engg. & Constructio
n)
Selectivity
(Airport)
Selective Growth
Selectivity Harvest/Divest
(Real Estate)
Selectivity Harvest/Divest Harvest/Divest
(Hospitality)
Business Unit Strength
Ind
ust
ry A
ttra
ctiv
eness
Strong Average Weak
Low
Med
ium
H
igh
Industry Attractiveness:• Annual market growth rate• Overall market size• Historical profit margin• Current size of market• Market structure• Market rivalry• Demand variability• Global opportunities
Business Unit Strength:• Current market share• Brand image• Production capacity• Corporate image• Profit margins relative to
competitors• R & D performance• Promotional effectiveness
SWOT Analysis
• Largest BOT player- pioneer• Strong Order Book position• Hedged against rising interest rates• In-house construction Strength• On-track execution• Sturdy financials
Strengths
• A Maharashtra – centric Company
• 78% revenues from 4 BOT Projects alone
• Low investments in R&D
Weaknesses
• Growth in Infra industry• Road – priority sector• Large ticket size road projects on the
anvil• Focus on PPPs• Venture into Airport Development and
Real Estate• Economic growth picking up
Opportunities• People’s perception• Land acquisition• Interest rate risk• Price escalation• Regulatory risk• Increased competition and aggressive
bidding• Project delays• Traffic dependent on economic growth
Threats
IRB
Speeding Ahead..
Pan –India presence
Enhancing and evolving capabilities
Innovation and R&D
Nation-building by strategic venture into infra sectors
The Strategy
To build upon our competitive strengths in the road infrastructure sector to become a market leader in India that is, completing the order book of INR 115873mn in an efficient and timely manner by strengthening our execution capabilities, adding to our existing pool of talented managers, engineers, and facilitating continuous learning with in-house and external training opportunities, and achieving this by continuing to focus on pursuing funded construction contracts, particularly EPC contracts, as such contracts enable us to move up the value chain to become the principal contractor on our funded construction projects.
Thank You!