Subsidiary company to raise Rs. 2,000 crore

Hindustan Construction Company (HCC) has announced a 55 per cent jump in its net profit at Rs. 28.31 crore for the first quarter of 2010-11 against Rs. 18.19 crore in the same period last year. The turnover was up 5 per cent at Rs. 1,008.22 crore against Rs. 964.09 crore and the operating profit 12.4 per cent at Rs. 122.83 crore against Rs. 111.51 crore.

The board of directors has also announced the issue of bonus shares in the ratio of 1:1. Additionally, according to a company statement, Lavasa Corporation, HCC's subsidiary, has obtained board approval for an initial public offering (IPO) of up to Rs. 2,000 crore of fresh equity shares, subject to market conditions and obtaining necessary regulatory approvals.

Ajit Gulabchand, Chairman and Managing Director, HCC, said, “Lavasa's IPO will unlock its true value, thereby enabling HCC to be one step closer in realising its vision of creating a hill city development in India which offers infrastructure better than that available in an average Indian city.” The order book now stands at Rs. 19,346 crore. HCC was awarded four major contracts worth Rs. 1,590 crore during the quarter.

Lavasa's revenues during the quarter were Rs. 181 crore, up 94 per cent, with the net profit at Rs. 49 crore, up 87 per cent.

HCC Infrastructure (HIL), a wholly-owned subsidiary of HCC, entered into a strategic partnership with Orascom Construction Industries (OCI), a leading construction contractor in the Middle East, for bidding and developing large National Highways Authority of India (NHAI) concessions. In addition, HIL is working with Vinci Concessions (France) on the first mega project opportunity. The company has a current portfolio of Rs. 5,500 crore that includes six NHAI road developments. The recently awarded West Bengal Concession Agreements have been signed and financial closure has been achieved for Raiganj-Dalkhola. The Elevated Expressway on the Delhi-Haryana border is expected to start operations in October, three months ahead of schedule. During the quarter, HCC Real Estate, a wholly-owned subsidiary divested 74 per cent stake in its new age business destination, ‘247Park' in Mumbai, valued at Rs. 775 crore to IL&FS Milestone Fund.

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