OREANDA-NEWS. Three unlisted infrastructure companies of the USD 100 billion Tata Group ‘Tata Realty & Infrastructure, Tata Housing Development Co and Tata Projects ‘are looking at investment opportunities of about Rs 70,000 crore in infrastructure, rail, roads, bridges, and real estate besides heavy engineering in the next five years as India eyes a 6-8 per cent growth.

Tata Group officials cited huge opportunities in roads, commercial infrastructure, power generation, transmission & distribution and railways. New businesses were coming up and the ones aggressively bid were up for sale at lower valuations ‘as in roads ‘giving the Tata companies opportunity to grow organically as well as inorganically, they said.

Brotin Banerjee, MD and CEO at Tata Housing said they were looking at residential projects in both luxury and affordable housing segments where it would invest around Rs 35,000 crore in the next five years.

‘Around 70 per cent of this investment will go into land acquisition and construction activity. Most of the investment would come from internal accruals and part of it would be funded through debt as and when required over the coming years,’ Banerjee said.

Tata Housing has around 26 projects in the premium and affordable segments. Of this 60 per cent is in the affordable segment. The company has a total of 55 million sq ft of space in various stages of development. The company would also be looking at housing and redevelopment projects in Sri Lanka, Mayanmar and Bangladesh in the coming years, Banerjee said.

Sanjay G Ubale, MD & CEO at Tata Realty and Infrastructure (TRIL), spoke of wide opportunities in the road sector where they had identified around 10 sites they would bid for once NHAI comes up with the bids. TRIL expects to win at least two of these projects.

‘We are also looking at inorganic growth where we would acquire completed and operational projects to enhance our portfolio of lane kilometres. In two years, we want to increase our portfolio to 2,000 lane km,’he said

‘Things have started to stabilise now and we will see the premiums for the projects awarded come down from the highs of the last few years. The situation has also presented us with opportunities to look at secondary assets where valuations have dropped,’he said.

TRIL recently bought three road projects from IVRCL. They are also bidding for airport projects in Goa, Navi Mumbai and Jamshedpur and see opportunities in the development of IT, ITes and SEZs in various parts of the country apart from commercial residential projects the company would exit in two years. ‘We have an investment plan of around Rs 22,700 crore in the next five years,’Ubale added.

Funding for these projects wouldn’t be an issue as lots of sovereign and wealth funds globally with lower expectations would be interested in taking over equity from developers planning to exit road and other infrastructure projects. Besides there was a lot of interest from private equity players to fund infrastructure projects, looking at internal rates of return of around 13-15 per cent, Ubale said.

Tata Projects that undertakes engineering procurement and construction (EPC) projects in the heavy engineering space covering steel, power generation, transmission and distribution, hydrocarbons, railways and dedicated freight corridors, is looking at huge opportunities in power generation, steel, transmission and distribution in the coming years.

‘We see valuable projects coming up in the dedicated freight corridors. This will mean a lot of work in the power generation and steel blast furnace space. Our investment is the working capital requirement and employee costs, which is around Rs 2,000 crore per annum. This would be around Rs 10,000 crore for five years,’said Vinayak Deshpande, MD of Tata Projects.

According to the Tata Group, there are eight Tata companies present in the diverse but related space of infrastrucutre like energy, telecom, realty, transportation, project execution and project consultancy that have spent around 7 per cent of the total private sector investment in infrastructure development during the 11th Plan period. In the financial year 2011-12, about 12.4 per cent, which is roughly about USD 12.5 billion of the group’s revenues, came from Tata companies in the infrastructure space.