Aim to cut debt and move to cash-positive position by year-end, says Reliance Infra

Reliance Infrastructure is in focus after the company proposed to build the Bandra-Versova sea link with Astaldi S.P.A (Italy) in 5 years, for an estimated Rs 7000 crore Engineering, Procurement, Construction (EPC) order.

Lalit Jalan, CEO, Reliance Infrastructure said the deal was one of the largest urban infra projects in India, with 17.2 kilometer sea link and  four outlets connecting to the mainland between Bandra and Versova. It is a 50:50 JV.

“The time line for the project is 60 months from the letter of award,” he said, adding that pre-work has started and immediately post monsoons, the construction work will start.

“Aim to finish the project ahead of 60-month scheduled timeframe,” said Jalan.

The EPC revenue from the project over the next 4-4.5 years would be around Rs 7000 crore, said Jalan.

With this order, the current orderbook stands at Rs 27000 crore, he added. Some of the other orders have been from the nuclear power sector, transportation sector, railways and roads.

“Given the current situation of private sector in infra space, we see huge demand for EPC orders. In fact between government of India projects and big state projects, we see almost Rs 300000 crore worth of contracts been given out year after year,” he said.

With regards to the deal with Adani, he said it was on track and would close it by the first quarter of financial year 2019.

The company is focused on reducing its debt and moving to cash positive by the end of the year, said Jalan aided by Adani transaction and DMRC award. The Company is also looking at monetising road assets. The total debt on book stands at Rs 12000 crore, said Jalan.

Talking about funding requirements for the projects, he said, EPC business by nature is negative working capital business, so equity requirement is not there.