National Buildings Construction Corporation (NBCC) was incorporated in November 1960 as a wholly government of India owned undertaking under the erstwhile ministry of works, housing and supply which is now the ministry of urban development. Its chairman and managing director Vishnu P Das spoke to Hindustan Times on a range of issues. Excerpts:
NBCC’s public issue opened recently. Has the response been up to expectation?
The government had decided to disinvest 10% of total equity shares. The issue price was decided at Rs 106 per share and was subscribed by 4.93 times. The public issue was listed in the Bombay Stock Exchange and the National Stock Exchange on April 12, 2012. This proves that it has met expectations and is doing well.
Any new opportunities you are exploring in overseas markets?
NBCC’s past growth has been excellent. It has been growing more than 20% in overall income. It has been always looking for venturing outside India and presently is working for the Maldives government. Besides, it is also exploring possibilities in Oman for border fencing projects besides Gabon and Sri Lanka for housing projects.
What is the consultancy model and areas you are presently covering?
NBCC’s business model revolves around project management consultancy, construction work in power sector and real estate development. About 90% of the business comes from project management and consultancy and balance from power projects and real estate. In real estate, selective purchase of land is done from government and private agencies. NBCC has no intention to participate for power sector projects at lower rates to get jobs. Without expected margins, it is not quoting its rates in power sector. In real estate it is not inclined to create large land banks and block investments.
NBCC depends on the government for new projects, how do you deal in case of delays?
NBCC is acting as an implementing agency for various government jobs and the responsibility to complete the work within time and cost rests with NBCC. However, it uses its project management consultancy expertise for completion of projects within time and cost to avoid delays. In case of levy of any compensation for delays, the contractor has to bear the same as NBCC is an Implementing Agency.
What is the status of your foray into coal and power sector?
At present, there is no plan to foray into coal and power sectors as the climate is not conducive for investment in these sectors. NBCC would wait and take a call at the opportune moment.
To what do you owe the company’s growth in net sales?
NBCC has large technical manpower. Being in construction as a public works organisation, it gets government Project. The repeat orders continue to come as NBCC completes works within time and cost. It has helped us to expand in various sectors. The presence in various states helps to get into action faster.