Infrastructure (General)

 

Overview

Infrastructure, as an industry, is a major propeller of growth and power to the economy. It builds on the fundamental strength of the country through hard and soft infrastructure that includes railways, bridges, dams, power, roads, civil defense and critical infrastructure. Port development is on the priority list of the new government. The 12th Five Year Plan announced its agenda of investing USD 1,000 billion in to the country’s infrastructure with private sector playing a vital role of bringing in 40% of the total investment. Infrastructure flourished compared to the previous fiscal since production of inputs like power, steel, coal and cement rose. Last year, production of power moved up by 8.85% – be it thermal, nuclear, hydro or renewable, each segment showed results that surpassed targets. Goods traffic through railways, cargo at major seaports and airports, telephone switching capacity improved as compared to the previous fiscal year. On the other hand, production of natural gas, crude oil and up gradation of highways dipped. This industry contributes 10% to India’s total GDP and stimulates demand from industrial, real estate and various other sectors. With the Indian aviation industry on its road to become the third largest in the world by 2020, Infrastructure can expect heavy investments in to port establishments. Major players of this industry based on sales would be Larsen and Toubro, BHEL and Jaiprakash Associates.

 

Buy Industry Analysis

 

Outlook

Several infrastructure development projects, some under construction and others completed have portrayed infrastructure as a potent force shaping the economy.

 

  • Gujarat International Finance Tech City is on its way with the best software technology park of India.

  • Delhi Metro and its integration with the public transportation system would set an example for outstanding public transport structure.

  • Two solar parks – one in Gujarat (India’s First and Asia’s largest) and the other in Rajasthan add to the sustenance of power sector in India.

  • The world’s highest rail bride – an under construction arch bridge in Jammu & Kashmir will be completed by December 2015.

  • India’s longest six-lane controlled-access expressway – the Yamuna Expressway would be 165 Km long connecting Greater Noida and Agra.

  • The Bandra – Worli Sea Link is a classic example of the finesse with which India builds on its infrastructure.

  • The Banihal Rail Tunnel which is a little over 11 Km long connects Bichleri valley and Qazigund in Kashmir. Pir Panjal Railway tunnel is the longest tunnel in India and third longest in entire Asia,

  • Bus Rapid Transport System in Gujarat has strongly modernized the public transport channel in Ahmedabad. Cities like Delhi and Jaipur have similar systems as well.

  • Up gradation of airports like the introduction of a new terminal at India’s busiest airport – The Indira Gandhi International Airport and the establishment of airports in various cities has helped several connecting industries too.

  • The second largest concrete gravity dam in the world after the Grand Coulee dam in USA, the Sardar Sarovar Dam of the Narmada Valley Project has the third largest spillway discharging capacity across the globe.

 

With complete authentication through automatic route for townships, cities and numerous other robust measures to promote foreign investments, FDI brought in the construction segment from April 2000 to January 2015 amounted to US$ 24,028 million. India needs to sign inter country with other countries like the one with USA to lay out Infrastructure Collaboration Platforms.

 

Future Potential

PPPs in the domestic scenario and Joint Ventures with international companies should be modeled to bring in the best from both public and private sectors along with foreign resources to enhance infrastructure outlook for India. Establishment of Smart cities has been a strong initiative with comparatively better execution than in the past. The US$ 100 billion Delhi Mumbai Industrial corridor Project would be the biggest infrastructure project that India has ever attempted and should see completion by 2017. Mega Power projects and establishment and up gradation of sea and airports, roadways and bridges would build solid foundations for the economy. Nevertheless, effort should be made to check the influence of such investments to maximum area and population possible. Minimal disparity should exist among funds in planning, procurement and application.

Debt is one of the major worries in this sector. Debt Service Capacity of major companies like JP Associates is low, thus even when these companies have valuable assets; their speedy diversification into debt-leveraged projects has given further leeway for the creation of a higher number of default-like situations. The industry report will address the scope and effects of such debt in detail.

Small investor's attention can be attracted to this sector by regulation and promotion through REIT and INVITs. With the help of banking support, incentives should be increased and in feasible cases, strategic alliance can be introduced.

 

What this report contains:

  • A detailed overview of the industry

  • Structure of the industry from both, domestic and international perspectives

  • Related industries that this industry has inter-dependencies with and their understanding

  • Detailed analysis of industry segments in terms of the value and depth of corresponding market

  • Analysis & insights about the elements and critical success factors of this industry using strategic models

  • A forecast on the state of this industry in 2020, predicting the growth and movement patterns for 2016 - 2020

  • Our professional analysis on the future of the industry based on strategic actions adopted by major industry participants

  • Quantitative estimates and forecasts of the growth prospects of the industry using revenue and financial forecasting models

www.ngeninvest.com optimized for & best viewed in Google Chrome & Mozilla Firefox at standard resolutions.