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No Constraints in Finances for Road Projects: Ashoka Buildcon

Ashoka Buildcon's highway projects are not facing any constraints on finance availability.

The rising interest rates hurt construction companies the hardest. Most of the civil construction and contracting companies like Ashoka Buildcoon are trading trading closer to their 52-week lows on bourses. Last week, Ashoka Buildcon won the bid for a National Highway Authority of India project. The company’s share price is holding firm in flat-to-negative market. Paresh Mehta, CFO, Ashoka Buildcon spoke to NDTV Profit recently. Below is the verbatim transcript of the interview (Watch Video: http://profit.ndtv.com/video/Ashoka-Buildcon-on-NHAI-order-fund-raising/217477)

NDTV: Give us a little bit of detail on the NHAI’s project that you recently won?

Paresh Mehta: We won NHAI’s, NH number-42 (national highway), project in Cuttack-Angul section (in Orissa). It is a Rs 1,100 crore project, of converting two lanes to four lanes and lies towards the south of National Highway-6 and caters to major steel, power and cement industries.

NDTV: Is there any execution time line that you want to share with us?

Mehta: After signing the concession agreement in the next 30 to 45 days, we have to finish the project in three, three and a half years’ time.

NDTV: This order represents how much of your current order books?

Mehta: Our current order book with this order constitutes around Rs 5,200 crore and would be around 20 per cent of our current order books.

NDTV: How many more orders you are expecting this year?

Mehta: We are into road developments and bid for good projects which are very lucrative. If any good projects come in we will bid. We will keep not bid projects just for the sake of it.

NDTV: Are high interest rates affecting your borrowing plan?

Mehta: As far as road highway projects are concerned we are not facing any constrains in the finances. We are borrowing on interest rates of 12.25 per cent which is quite fine and we expect the interest rates to go down over a period of time. It is a matter of concern but that is already factored in.

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