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| IVR Prime to hive off 3300-acre land bank |
| BS Reporter / Chennai/ Hyderabad Jun 01, 2009, 00:33 IST |
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IVR Prime Urban Developers Limited, the urban infrastructure subsidiary of Hyderabad-based IVRCL Infrastructure and Projects Limited, is planning to sell its 3,300-acre land bank in the light of the prevailing realty market conditions, said IVRCL Infra chairman and managing director E Sudhir Reddy.
“IVR Prime has been really affected because of the bad realty market conditions. We have no guts to fight against the market. We have decided not to make any investment into the company until the market sentiments improve. Now the market is only for affordable housing and we cannot develop that kind of a housing concept as the land was purchased at higher prices. We will sell all the land once we get a suitable buyer,” Reddy told mediapersons here on Friday
IVR Prime recorded revenues of Rs 75 crore in FY09 as against Rs 596 crore in the previous year. Net profit stood at Rs 8 crore as compared with Rs 176 crore, as its performance was on a low key in tune with the realty market conditions.
IVRCL Infra, which currently has an order book of about Rs 14,500 crore, is expecting to bag another order worth Rs 1,000 crore within the next 30-45 days. Of the overall order book, nearly 69 per cent would be from the water and environment segment, 5 per cent from roads, 4 per cent from power and the balance from the buildings segment.
It targets to have an order book of Rs 16,000-18,000 crore by the end of March 2010.
Stating that its design and engineering subsidiary Hindustan Dorr-Oliver Limited (HDO) had done pretty well during FY09, posting a net profit of Rs 30.16 crore (Rs 22.63 crore) on income from operations of Rs 522.26 crore (Rs 310.35 crore), he said the company was planning to come out with a rights issue or a qualified institutional placement.
The idea is to increase the networth of the HDO, whose market cap is Rs 250 crore at present. A resolution to this effect has already been passed by the board and the investment should happen within the next three months, he said. “The growth story of the IVRCL Group as a whole would mainly come from IVRCL Infrastructure and HDO.” Reddy said.
IVRCL is also planning to sell its oil and gas business, in which it has a stake in joint venture with Gujarat State Petroleum Corporation Limited (GSPCL).
The acquired Alkor Petroo Limited is a closely-held oil and gas exploration and production company that has interests in five exploration blocks in Yemen and Egypt in 2007. Alkor owns 25 per cent in three blocks in Yemen and 20 per cent in two blocks in Egypt. GSPCL and others own the balance interest in these five blocks. GSPCL is the operator for all the five blocks.
IVRCL had earlier said it expected potential revenue earnings of over $1 billion from one of the blocks in Yemen and one block in Egypt during their life, and that it would be investing $50 million (Rs 200 crore) during the exploration phase.
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