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Infra

1
Real Estate

Social distancing won’t prod companies to get bigger offices. They’ve low demand, margin to fight.

Due to new norms, workplaces will have to decongest and able to accommodate only 30%-40% of the staff. Given the looming threat of a recession, not many companies will invest in bigger office spaces. While work from home will continue even after lockdown, landlords should prepare for what will unfold in the next two-three quarters.

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Policy and regulations

Force majeure or not, NHAI’s intent to help toll operators will shape its future monetisation plans

Road-construction companies and toll operators are disappointed with the measures announced by the finance minister recently. Force majeure is one clause in contracts that could help them. While NHAI may be stretched right now to give immediate financial relief, the intention to resolve the private partners’ woes is all that matters.

Strategy

Small and steady wins the race: how KNR Constructions became the only infra company to beat Nifty50

Amid a bloodbath in mid- and small-cap construction stocks, KNR has relatively stood firm. With investors increasingly trimming exposure to debt-heavy infrastructure businesses, KNR has a clear advantage on that front. However, the most important question is: can an infrastructure company be wary of debt and still be successful in business for long?

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Under the lens

I-T raids, unpaid dues, corporate-governance issues: NHAI’s new tenders attract sketchy contractors

NHAI figures show the participation of listed entities has not just decreased but diminished, and new companies with INR1,000 crore annual revenue and moderate credit-rating risk are entering the fray. While the highways authority evaluates bidders under financial and technical criteria, it’s high time to introduce corporate governance as the third parameter.

Infrastructure

Sadbhav Infra’s proposed remerger leaves investors bitter. Did Nomura, Norwest get a raw deal?

In October 2019, Sadbhav Infra announced its plans to remerge with parent Sadbhav Engineering, owing to rising debt and falling profitability. The deal has sounded the death knell for Sadbhav Infra’s investors, who had believed in the company’s asset-ownership pitch back in 2015, at the time of listing. But for parent Sadbhav Engineering, it’s a blessing.

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