Hyderabad: Once toast of the nation and hailed for their rapid rise in the realm of infrastructure and allied sectors, GMR Infrastructure, GVK Power & Infra, and Lanco Infratech are now reeling under a large pile of debt which is taking sheen off their bottom line quarter after quarter.
The infrastructure majors founded by Telugu entrepreneurs are currently weighed down by a combined long-term debt burden of Rs 1,04,640 crore as on March 31, 2016 and the pile of debt will be much bigger if short-term liabilities, which need to be cleared in the current fiscal, are also included.
GMR declares capex holiday in energy, road projects
GVK exploring various options to reduce debt pile
Lanco looking to sell stake in key assets
Economic slowdown in recent years and delays in land acquisitions as well as fuel supply linkages have stalled many infrastructure projects across the country, badly affecting these companies. A study by The Hans India of the financial results declared by the three companies for the fiscal year 2015-16 revealed that they together reported a total loss of Rs 3,360 crore, with the GMR Infra topping the list with Rs 2,161 crore net loss last fiscal, as the interest burden took toll on their performance.
The Lagadapati Amarappa Naidu and Company Infratech, Lanco Infratech for short, is at the top among the three with a total debt of Rs 41,608 crore on its books, currently. Owned by the Vijayawada-based Lagadapati family, the infrastructure major which is into power, construction and real estate sectors reported Rs 265 crore loss on a total revenue of Rs 9,482 crore in 2015-16 as finance costs, at Rs 2,513 crore, ate into the margins.
The company is looking to sell stake in key assets to bring down the debt. The GMR Infra founded by Grandhi Mallikarjuna Rao is not far behind the Lanco when it comes to the borrowings as it has Rs 39,814 crore long-term liabilities on its balance sheet and paid Rs 4,057 crore towards interest in FY16.
However, the debt burden came down from Rs 40,956 crore a year ago as the infrastructure major pursued ‘Asset-Light-Asset-Right’ strategy vigorously and divested stake in several businesses including energy vertical to cut down the debt.
Furthermore, it has announced capex holiday in energy and high projects and is looking to bring strategic partner into airport holding company as a part of its initiatives to cut down on borrowings, according to GMR’s recent presentation to investors.
The GVK Power & Infrastructure, which is also into airports, power, coal mining, hospitality and roads, saw its long-term liabilities increasing to Rs 23,218 cr in FY16 from Rs 20,738 cr a year earlier. It paid Rs 2,149.36 crore towards finance costs and reported a net loss of Rs 934 cr last fiscal.
“The company is very actively studying various options for reducing its debt, the details of which we are currently unable to share with you, as it is still work in progress,” a spokesperson for the GVK Group said, responding to queries from The Hans India. However, GMR Group and Lanco did not respond to similar requests.