Institutional Equities - Online Share Trading

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FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 Apr'10-Jul'10 Jul'10-Mar'11 Apr'11-Aug'11 FY12E FY13E FY14E FY15E Institutional Equities Exhibit 34: Award of orders per day (km) 25 ( Order awarding Kms/day) 21.9 21.9 21.8 20 15 10 5 0 10.4 1.0 0.9 3.6 13.0 4.8 3.4 1.8 9.2 14.0 7.4 6.6 12.3 16.8 Exhibit 36: Recent policy reforms Source: NHAI, Nirmal Bang Institutional Equities Research Exhibit 35: Summary of award of contracts (2011-12) Month Number of projects Project cost (Rsbn) April 2011-Aug 2011 (awarded) 10 163 September 2011 7 66 October 2011 7 31 November 2011 12 91 December 2011 5 37 January 2012 5 53 February 2012 7 91 March 2012 4 37 Total (km) 7,994 569 Award of annuity and EPC projects 1,000 - Award of projects - state governments 1,000 - Total contracts awarded in FY12(km) 9,994 - Source: NHAI, Nirmal Bang Institutional Equities Research 100% FDI under the automatic route is permitted for all road development projects 100% income tax exemption for a period of 10 years NHAI agrees to provide grants/viability gap funding for marginal projects The maximum grant provided will be 20% of the project cost. In case the grant is inadequate for making a project commercially viable, an additional grant of up to a maximum of 20% of the project cost is possible. The time required for construction (typically 24-30 months) is included in the concession period. A concessionaire starts earning revenue from COD, and this gives the concessionaire an incentive for early completion of construction. A time limit of 180 days is set for achieving financial closure by the concessionaire. In the event of failure, the bid security stands forfeited. Source: NHAI, Nirmal Bang Institutional Equities Research NHAI project target achievable in FY12 NHAI has planned month-wise award schedule for BOT (toll) road projects totaling 8,000km for the first 10 months of FY12. These 59 BOT road projects, having aggregate project cost of Rs647bn, would be developed on toll basis. To ensure that the target is met, the government has kept a buffer with an overall pipeline of 10,000km. Importantly, the calendar is front-ended, with 67% of the 8,000km (Rs569bn) BOT road projects scheduled to be awarded by January 2012, which would take care of any delay in the award of projects. Looking at the recent momentum in awarding projects (around 25% of planned) and project pipeline at the bidding stage, we believe the FY12 target will be achieved. 16 Infrastructure Sector
Institutional Equities Exhibit 37: Projects to be awarded in FY12 Project Name State Estimated Project Cost (Rsbn) Eastern Peripheral Expressway Uttar Pradesh/Haryana 27.0 Kundapur-Karnataka/Goa Border Karnataka 19.7 Jabalpur-Katani-Rewa Madhya Pradesh 19.1 Vijaywada-Elluru-Gundugolanu Andhra Pradesh 17.4 Barwa Adda-Panagarh West Bengal 16.7 Allahabad Bypass-Varanasi Uttar Pradesh 15.2 Etawah-Chakeri Uttar Pradesh 14.9 Agra-Etawah Bypass Uttar Pradesh 14.9 Chakeri-Allahabad Uttar Pradesh 14.3 Panikoili - Rimuli Orissa 14.1 Varanasi-Sultanpur Uttar Pradesh 13.5 Chnadikhole-Dubari-Talchar Orissa 12.9 Maharashtra/Karnataka Border-Sangareddy Karnataka 12.5 Solapur-Maharashtra/Karnataka Border Maharashtra 12.4 Angul-Sambalpur Orissa 12.2 Raipur-Bilaspur Chhattisgarh 12.2 Vikravandi-Kumbakonam-Thanjavur Tamil Nadu 11.7 Patna-Buxar Bihar 11.3 Cuttack-Angul Orissa 11.2 Madurai-Parmakudi-Ramanathapuram Tamil Nadu 11.0 Amravati-Dhule-Gujarat Border Maharashtra 10.8 Gwalior-Shivpuri Madhya Pradesh 10.6 Hospet-Chitradurga Karnataka 10.5 Aurangabad- Saraipally- Orissa Border Chhattisgarh 10.2 Lucknow-Sultanpur Uttar Pradesh 10.1 Rohtak-Hissar Haryana 9.5 Solapur-Maharashtra/Karnataka Maharashtra 9.5 Source: NHAI, Nirmal Bang Institutional Equities Research Rising competition to impact return We have seen that delay in NHAI order pick-up, lack of momentum in other sectors coupled with existing projects nearing completion have increased the competition for infrastructure projects. This was visible in the bidding pattern for nine projects awarded this year (NHAI had estimated an aggregate outflow as grants, but on the other hand the developers promised a certain premium in most of the projects). We believe the trend of competitive bidding will be over as we have seen a pick-up in order inflow and visibility in the bulk of orders to be awarded by NHAI in FY12 and FY13. Exhibit 38: New projects awarded New projects awarded Total cost (Rsmn) Grant (premium) Rsmn Company name Kota-Jhalawar 5,300 35 Keti Construction Nagpur- Wainganga Bridge 4,841 274 JMC Projects Dhankuni-Kharagpur 14,000 1261 Ashoka Buildcon Ahmedabad-Vadodara 49,200 (3,090.00) IRB Infrastructure Beawar-Pali-Pindwara 26,000 (2,510.00) L&T Kishangarh-Udaipur-Ahmedabad 5,387 (636.00) GMR Infrastructure BarwaAdda-Panagarh 16,700 1060 DS Construction Jabalpur- Lakhnadon 7,800 VGF-370 Gannon Dunkerley Krishnagiri-Tindivanam 6,200 Semi-annual payments of Rs400mn Transstroy-OJSC consortium Shivpuri-Dewas 28,150 1809 GVK Infrastructure Total 163,578 - - Source: Company, Nirmal Bang Institutional Equities Research 17 Infrastructure Sector
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Institutional Equities - Online Share Trading

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