V. Sridhar

To raise

Rs. 700 crore through public

offer in January

BANGALORE: IL&FS Transportation Networks Ltd. (ITNL), a subsidiary of Infrastructure Leasing and Financial Services Ltd (IL&FS), is planning to diversify its operations in airports and transportation management.

Speaking to The Hindu, ITNL Managing Director K. Ramchand, said the company’s acquisition of Maytas gave it an opportunity to “leverage its learning experience” to “get involved in the airport sector.” Maytas, formerly a subsidiary of the Satyam Group, had won the contracts to build and operate the Gulbarga and Shimoga airports in Karnataka. IL&FS was also the advisor for the Bengaluru International Airport project at its early stages.

Mr. Ramchand said the company’s portfolio of road projects was now more than 10,000 lane km, about 60 per cent of the revenue stream was from annuities paid by the National Highways Authority of India’s (NHAI) projects. The remaining portion of the company’s revenues was from the collection charges.

“This ratio is favourable because it ensures a stable stream of revenues for the company,” he said. The NHAI’s award of projects on an annuity basis had made it “very attractive” for companies participating in road projects, Mr. Ramchand said. “Annuities are back in favour since 2008. The NHAI is now willing to live with annuities of 18-20 per cent of the cost of projects over a 15-year term,” he said. The company’s planned initial public offering (IPO) of about Rs.700 crore was scheduled for January next, “if market conditions remain favourable,” Mr. Ramchand said.

The company’s portfolio of projects had increased from 7,000 lane km in 2008 to 10,000 lane km. About 4,000 lane km of the portfolio were already operational, Mr. Ramchand said.

Only about 3,000 lane km of the NHAI’s projects had been through the PPP route. “We plan to target the tremendous opportunities in the operations and maintenance (O&M) space,” Mr. Ramchand said.