gayatri projects limited - Edelweiss

GAYATRI PROJECTS LIMITEDConcreting plants such as batching plants, concrete mixers, transit mixers, concrete pavers. Road equipment such as vibratory tandem rollers, electric paver finishers, mechanical paver finishers, hot mixplants, static rollers, truck mounted pressure bitumen sprayer, integrated stone crushing plants. Quarry equipments like wagon drills, jack hammers, air compressors. Transportation equipments such as cars and jeeps, tippers, tractors, water tankers, trailers. fabrication and erection plant such as welding generators, gas cuttings sets, work shop equipments, cranes, generatorsand other miscellaneous equipments.MarketingNormally in the construction sector major portion of the work is awarded by Government sector, however now substantialamount of contracts from private sector are also being offered. Normally a contract offered by Central or State governmentis backed by budgetary support or financial support or grants from various institutions and agencies both India and International.As such the normal course for awarding these contracts by the Government or their agency is through the process of tendering.In view of the nature of our market, the major sources of information of ensuing tenders for construction contracts arenewspapers and government gazettes.In order to ensure that we can effectively bid for these contracts we have a separate department which is headed by ManagerTenders, which keep track of these tender notification or advertisement and prepares the tender document. Further bidingcapacity of a party is very important criteria for pre qualification in a contract. Also as per the requirements of the tender wetake decision of forming Joint Venture with suitable partner or sometimes, as a strategic decision we bid in consortium withother reputed companies.CompetitionThe construction industry is highly fragmented with large number of players operating in an unorganized sector and a fewof them in the organized sector. Some of key players in the construction industry are Gammon (India) Ltd., NagarjunaConstructions, Simplex Concrete Piles Ltd., IVRCL Infrastructure & Projects Ltd. With the works coming up all over country,the number of agencies have increased. This forced most of the key players to limit their bidding to Mega Projects where fewagencies get pre-qualified. To meet this tough competition, we are planning to enter into various joint ventures.Business ModelFor our business, there are two necessary requirements, which determine our ability to undertake and execute projects.These are pre-qualification parameters and bidding strategy. These are explained as follows:a. Pre qualification parametersTypically a project owner/client conceives of a specific project and follows it up with the appointment of a consultantwho prepares a detailed project report. This report addresses various aspects of project implementation commencingfrom obtaining clearances, right of ways, scope of work, technical parameters, etc., to related costs which define theapproximate estimated cost of the project.At the next level the project owner invites pre-qualifications from prospective bidders to assess and identify contractorswho are capable of bidding for the project and subsequently implementing the same, if awarded. The detailedproject report data is utilized to define the pre-qualification criteria by the project owner.For projects across the various sectors, the project owner /client normally specify the qualifying criteria, whichinclude:Technical Capability: The company should have the experience of having implemented projects of similar nature,necessary manpower with a relevant profile to suit the project and the experience to execute it. Depending on theproject, relevant machinery as specified by the client should be available with the company. This may be owned oroutsourced / hired from a third party.Financial Strength: This includes the minimum annual turnover, net worth requirement as well as working capitalrequirements.In the event the project allows for association of more than one company to participate in the contract to enable thepartners to pool in their resources, thereby meeting the threshold pre-qualifying criteria, such a method of invitationis known as joint venture participation. Joint Venture participation allows the individual partners of the proposed58