With warrants, Dilip Buildcon will fund ₹2,000 cr, InvIt

 With warrants, Dilip Buildcon will fund ₹2,000 cr, InvIt

Mumbai: According to the company's second-quarter analyst presentation, Dilip Buildcon Ltd. (DBL), an engineering, procurement, and development (EPC) company, is seeking to raise up to ₹2,000 crore from Naresh Korthari-led Alpha Alternatives Group, a stakeholder in alternative assets, through an amalgamation of warrants along with the InvIT route over a period of 12–18 months.

As a condition of the agreement, Alpha and its affiliated companies would acquire warrants for ₹328.05 each, representing a 10% ownership in Dilip Buildcon. This will result in warrants providing the corporation with an inflow of ₹530 crore. In addition, Alpha will acquire a 26% ownership in 18 road assets via the InvIT route. DBL will own the remaining 74% of the shares.

According to Dilip Buildcon, Alpha is expected to raise ₹700–800 crore in capital via warrants and InvIT in FY2024, with the balance ₹1200–1300 crore coming in FY2025.

"DBL will receive ₹2000 crore in capital and ₹4000 crore in invIT units, resulting in an annual cash inflow of ₹400 crore." Our plan is to see the EPC business provide us consistent business, reinvest the cash that was put in the firm, and establish a steady income stream via our InvIT. We will continue to add units to this particular InvIT as our EPC business and PPP projects expand," DBL's head of strategy, Rohan Suryavanshi, said during the company's Wednesday analyst call.

The funding is consistent with the previously established overall debt reduction objective of Dilip Buildcon. By the 2025 fiscal year, the corporation aims to have no net debt.

"As previously said, we have lowered our goal of reducing ₹800–1000 crore from FY23 to FY24 and have already lowered ₹300 crore of debt from FY23 levels. After current fiscal year ends, our net debt would have increased to between ₹1300 and ₹1500 crore. By the end of the next fiscal year, we want to have DBL completely debt-free," Suryavanshi said. We've decided to proceed cautiously from now on. Our main goals will be to increase cash flows, cut capital expenditures, and maximize asset value," he said.

At the conclusion of the June quarter, Dilip Buildcon had ₹23,988 crore worth of orders in its ledger. These included projects for tunnels, metros, special bridges, mining, irrigation, water supply, and roads and highways.

According to Suryavanshi, the business does not want to expand at a rate of 25% annually. "The order book will expand in line with our desired level of income. We want to pursue an annual order value of ₹10,000 crore," he said.

"The road sector seems to be strong. Good investments are flowing into the businesses and initiatives in this field. Both the ham and the EPC are in use. Few awards are being awarded by NHAI to BOTs at this time, according to Jagannarayan Padmanabhan, senior director of logistics for shipping and mobility at CRISIL.