APR Constructions Limited - Saffron Capital

Key Highlights
Government Investments: Due to socio-economic benefits, irrigation has been the key focus area for many state
governments. Further, as irrigation investments are completely government driven, the risks of cancellation of
projects is also low.
(Source:CRISIL Research, Indian Infrastructure Report, November 2009)
After commencement of AIBP, 109 major/medium projects and 6,584 Surface MI Schemes have been reported to
be completed so far. An additional irrigation potential of 5.44 million hectare has been created through
major/medium irrigation projects and an irrigation potential of 0.45 million hectare has been created through
Surface Minor Irrigation Schemes up to March 2009.
(Source: Indian Portal: www.india.gov.in)
ROAD INDUSTRY – OVERVIEW
India has one of the largest road networks of 33 lakh kms consisting of:
Road
Length (In km.)
Expressway 200
National Highways 70,548
State Highways 1,28,000
Major District Roads 4,70,000
Rural and Other Roads 26,50,000
India has the second largest road network in the world.
About 65% of freight and 80% passenger traffic is carried by the roads.
National Highways constitute only about 2% of the road network but carry about 40% of the total road traffic.
Number of vehicles has been growing at an average pace of 10.16% per annum over the last five years.
(Source: www.nhai.org)
Demand
Roads are the most preferred mode of transport for both freight and passengers. Preference for road transport for
freight movement is primarily on account of large capacity expansions carried out by fleet operators, flexibility and
door-to-door movement. In addition, roads act as a primary means for last mile travel. Further, capacity constraints in
road transport are not acute as it is in railways. Also, the presence of multiple players ensures better scalability in
capacity when required.
(Source:CRISIL Research, Indian Infrastructure Report, November 2009)
Supply
CRISIL Research expects to see around 18,000 km (that is, 8 km per day) of roads in various phases of NHDP to be
developed at an estimated cost of around Rs 1,888 billion over the next 5 years from 2009-10 to 2013-14. The
government‟s focus on developing the roads sector and reduction in ambiguity in its policies is expected to aid future
investments in roads.
Around 14,000 km still remain to be awarded in Phase III and Phase V. Most of the projects in these phases are
expected to be awarded on BOT basis. After a lull seen in awarding projects in the last 2 years due to policy issues
coupled with the economic slowdown, CRISIL Research believes in favourable changes in government policies and
attractive returns in the sector would increase the private sector‟s participation and thus result in faster execution of
road projects.
Based on the past and current trend of awarding projects and the implementation schedule, CRISIL Research believes
that the ongoing projects under Phases I, II,III and V will be completed to a substantial extent (over 90 per cent) by
2016-17.
(Source:CRISIL Research, Indian Infrastructure Report, November 2009)
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