Infrastructure Sector Report November 2017

For updated information, please visit www.ibef.org November 2017
INFRASTRUCTURE

For updated information, please visit www.ibef.orgInfrastructure2
Table of Content
Advantage India…………………..….……. 4
Market Overview and Trends………...…….6
Strategies adopted……………....…………17
Growth Drivers and Opportunities…...…...21
Industry Organisations…………......………32
Useful Information……….……….....…......34
Porters Five Forces Framework…….…….16
Executive Summary……………….….…….3
Case studies......………………..………….28

EXECUTIVE SUMMARY
Source: Media sources, DIPP, Aranca Research
 FDI received in Construction Development sector (townships, housing, built up infrastructure and
construction development projects) from April 2000 to June 2017 stood at US$ 24.54 billion ; and in
Construction (Infrastructure) activities stood at US$ 9.82 billion.
Rising foreign direct
investment (FDI) in the
sector
 In the Union Budget 2017-18, the Government of India has given a massive push to the infrastructure sector
by allocating US$ 61.92 billion for the sector.
High budgetary
allocation for
infrastructure
 The infrastructure sector in India witnessed 33 deals in FY2016-17 involving US$ 3.49 billion as against
US$ 2.98 billion raised across 31 deals in FY2015-16, with the majority of deals led by the power, roads and
renewable sectors. Also, in April 2017, companies in Malaysia and India signed deals for infrastructure
projects worth US$ 3.86 to be implemented in India.
Rising infrastructure
deals
 Private sector is emerging as a key player across various infrastructure segments, ranging from roads and
communications to power and airports
Increasing private
sector involvement
 In 2016, India jumped 19 places in World Bank's Logistics Performance Index (LPI) 2016, to rank 35th
amongst 160 countries.
Improvement in logistics

Infrastructure
ADVANTAGE INDIA

ADVANTAGE INDIA
 India has a requirement of investment worth US$ 646 billion in
the infrastructure sector by 2022; 70 per cent of which will be
required in the power, roads and urban infrastructure sectors.
 Favourable valuation and earnings outlook makes this sector
an attractive opportunity.
 Only 24 per cent of the National Highway network in India is
four-lane, therefore there is immense scope for improvement.
 The Regional Connectivity Scheme (RCS) gives
opportunity for development of airports.
 Increasing impetus to develop
infrastructure in the country is attracting
the major global players like China Harbour
Engineering and Mizuho Financial Group.
 Construction Development sector and
Infrastructure activities sector received FDI
inflows amounting to US$ 24.54 billion and
US$ 9.82 billion, respectively from April 2000 to June 2017.
 With initiatives like ‘Housing for All’ and
‘Smart Cities Mission’ the Government of
India is working on reducing bottlenecks
and impeding growth in the infrastructure
sector.
 With the UDAY Scheme, that will help in financial
turnaround and revival of electricity distribution
companies of India, the power sector has been
registering strong growth.
 100 per cent FDI is permitted under the automatic across
various infrastructure sectors.
ADVANTAGE
INDIA
Source: Media Sources, DIPP, Aranca Research, PricewaterhouseCoopers
Note: UDAY – Ujwal Discom Assurance Yojana

Infrastructure
MARKET OVERVIEW
AND TRENDS

INCREASING FDI INFLOWS INTO THE SECTOR
Note: FDI – Foreign Direct Investment
Source: DIPP, Media sources, Aranca research
 Cumulative FDI inflows in the Construction Activities sector, which
includes infrastructure, reached US$ 10.26 billion between April
2000 – June 2017.
 Cumulative FDI inflows in the Construction Development sector,
which includes townships, built-up infrastructure and construction-
development projects, reached US$ 24.54 billion between April 2000
– June 2017.
 UAE-based firm, DP World, having previously invested US$ 1 billion
in India, is planning to invest another US$ 1 billion in India's
infrastructure sector along with logistics and container terminals
 Squared Capital, a global infrastructure investment company, plans
to raise up to US$ 4 billion through its second infrastructure fund,
which will be invested in infrastructure assets in India and across the
globe.
Visakhapatnam port traffic (million tonnes)
Cumulative FDI inflows between April 2000-June 2017
(US$ billion)
2.09
2.58
3.43
7.96
9.82
10.26
22.08
23.3
24.06
24.18
24.29
24.54
0
5
10
15
20
25
30
FY13
FY14
FY15
FY16
FY17
Q1FY18
Construction activities (includes infrastructure)
Construction Development: Townships, housing, built-up
infrastructure and construction-development projects

SUMMARY OF INFRASTRUCTURE PROJECTS
COMPLETED DURING THE 12TH FIVE YEAR PLAN
Source: Ministry of Statistics and Programme Implementation (MoSPI)
Sector Number of Projects Cumulative Expenditure (US$)
Road Transport and Highways 91 8.7 billion
Power 73 16.63 billion
Petroleum 65 19.48 billion
Railways 33 3.81 billion
Steel 20 8.13 billion
Shipping and Ports 20 1.78 billion
Telecommunications 14 463.62 million
Coal 9 2.26 billion
Fertilisers 6 596.24 million
Civil Aviation 5 861.16 million
Urban Development 5 678.83 million
Atomic Energy 1 168.93 million

RECENT PPP PROJECTS IN INFRASTRUCTURE
Source: infrastructureIndia.gov.in, Aranca Research
Project
Project
Authority
Project
Concessionaire Name
Signing Date
Project Cost
(US$)
Location
Period
(months)
Six laning of Handia-
Varanasi section in length
of 72.4 km NHAI
G R Infraprojects
Limited
31-Mar-2017 387.37 million
Uttar
Pradesh
180
Six laning of Chitradurga-
Davanagere section in
length of 72.7 km
NHAI PNC Infratech Limited 31-Mar-2017 224.26 million Karnataka 180
Four laning of Singhara-
Binjabahal section in
length of 104.1 km
NHAI Montecarlo Limited 29-Mar-2017 222.07 million Odisha 180
Four laning of Jhansi-
Khajuraho section in
length of 76.3 km
NHAI PNC Infratech Limited 28-Mar-2017 220.51 million
Multi State/
Centre 180
Four laning of Waranga-
Mahagaon section in
length of 66.9 km
NHAI Sadbhav Engineering
Limited
28-Mar-2017 166.90 million Maharashtra 180
Four/six laning of Bodare-
Dhule section in length of
62.8 km under NHDP-IV
NHAI
Sunil Hi-Tech
Engineers Private
Limited
23-Mar-2017 199.16 million
Andhra
Pradesh
180
Six laning of NH-8 in
length of 93.2 k m of
Shamlaji-Chiloda section
NHAI Sabarkantha Annuity
Private Limited
25-Jan-2017 201.74 million Gujarat 180
Note: NHAI : National Highway Authority of India

STRONG MOMENTUM IN EXPANSION OF ROADWAYS
6.9
6.8
8.3
8.6
8.6
11
13.4
16.10
19.20
0
2
4
6
8
10
12
14
16
18
20
2009
2010
2011
2012
2013
2014
2015E
2016F
2017F
Source: Business Monitor International (BMI), Ministry of External Affairs, Aranca Research
Note: CAGR - Compounded Annual Growth Rate, FY - Indian Financial Year (April - March), F - Forecast, NHDP - National Highway Development Project, SARDP-NE: Special Accelerated
Road Development Programme for the North Eastern Region and LWE - Left Wing Extremism Programme; Figures are as per latest data available
 Value of total roads and bridges infrastructure in India is estimated to
have expanded at a CAGR of 13.6 per cent over FY09–17 to US$
19.2 billion
 In April 2017, the National Highways and Infrastructure Development
Corp. bagged a project to build 5 tunnels worth US$ 3.42 billion.
These tunnels, namely, Zojila tunnel at Zojila Pass (14 kms), Vailoo
Tunnel at Sinthan Pass (8-10 kms), Z-Morah tunnel (6.5 kms), Pir-Ki-
Gali Tunnel on National Highway-244 (8.5 kms) and Daranga Tunnel
at Shudh Mahadev (4.5 kms), will help in avoiding road accidents
because of avalanches
 An outlay of Rs 6.92 trillion (US$ 107.64 billion) was approved by the
Government of India in October 2017 to build a road network of
83,677 km over the next five years. The outlay includes the
Bharatmala projects worth Rs 5.35 trillion (83.25 billion).
 In January 2017, the government proposed to lay down cycle tracks
on all highways and major roads pan India, to promote the use of
electric cars and public transport.
 Highway network in the country is expected to cover 50,0000 km by
2019. The National Highway Authority of India has created a new
highway operations division to focus on all non-commercial highway
operational activities like electronic toll collection, road safety,
incident management, and other modern amenities .
Visakhapatnam port traffic (million tonnes)Roads/ bridges infrastructure value in India (US$ billion)
CAGR 13.6%

STRONG REVENUE GROWTH FOR INDIAN RAILWAYS
8.68
9.87
10.97
11.97
12.88
14.31
17.11
19.09
21.66
24.49
24.60
0.00
5.00
10.00
15.00
20.00
25.00
30.00
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
Source: Vision 2020, Ministry of Railways, Aranca Research
Note: CAGR – Compound Annual Growth Rate, E – Estimates, FY – Indian Financial Year (April–March)
 Revenue growth has been strong over the years; during FY07–17,
revenues increased at a CAGR of 11 per cent to US$ 24.60 billion in
FY17.
 Revenues from the sector are estimated to reach to US$ 44.5 billion
by the end of FY20
 The Ministry of Railways is working on a plan to earn Rs 15,000
crore (US$ 1.56 billion) over the next 10-20 years through a rail
display network (RDN), enabling real-time information to
passengers.
 Indian Railway sector aims to boost passenger amenities
 In March 2017, Railways started a new segment of revenue
generation channel through auctioning for advertising and branding
contracts on 1000 trains. The front running brands are to sign this
contract for 5 years.
 All Indian Railways trains will become electric by 2022, resulting in
annual savings of Rs 11,500 crore (US$ 1.79 billion).
Visakhapatnam port traffic (million tonnes)Gross revenue trends over the years (US$ billion)
CAGR 11%

POWER GENERATION CAPACITY HAS INCREASED AT
A HEALTHY PACE
132.3
143.1
148
159.4
173.6
199.9
223.3
237.7
272.5
280.3
326.8
0
50
100
150
200
250
300
350
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
Source: CEA (Central Electricity Authority), Aranca Research
Note: GW - Gigawatt, CAGR - Compound Annual Growth Rate; FY18* - data upto June 2017
 Installed capacity increased steadily over the years, posting a CAGR
of 10.57 per cent in FY09–17 and stood at 326.84 (GW) by the end
of FY17.
 As of October 2017, India had a power generation capacity of 331.1
GW.
 As of June 2017, energy generation from conventional sources stood
at 307.7 billion units (BU).
 Indian energy sector is expected to offer investment opportunities
worth US$ 300 billion over the next 10 years.
Visakhapatnam port traffic (million tonnes)Installed electricity generation capacity (GW)
CAGR 10.57%

PERFORMANCE OF EIGHT CORE INFRASTRUCTURE
INDUSTRIES
Source: Ministry of Commerce and Industry
121.8
94.5
66.5
119.7
106.6
133.1
122
141.6
104.3
94.6
68.8
120.7
104
137.3
123.1
152.7
0
20
40
60
80
100
120
140
160
180
Coal
CrudeOil
NaturalGas
Refinery
Products
Fertilisers
Steel
Cement
Electricity
2016-17 April'17 - Sep'17
Index of eight core Industries The eight core infrastructure industries include coal, crude oil, natural
gas, refinery products, fertilisers, steel, cement and electricity.
 The overall index grew by 4.8 per cent during FY 2016-17.
 The growth in the index was led by electricity (10 per cent), steel (9
per cent), refinery products (8.9 per cent), cement (5.8 per cent) and
fertilisers (3.3 per cent).
 The cumulative growth of the index between April-September 2017
was 3.3 per cent.
 The growth in the index was lead by steel (6.2 per cent), electricity
(4.9 per cent), natural gas (4.3 per cent), refinery products (1.8 per
cent) and crude oil (0.2 per cent).

GROWTH IN INFRASTRUCTURE RELATED ACTIVITIES
Source: Economic Survey 2017
Growth in infrastructure related activities between
April-September 2016
6.6
9.8
1.8
-3.9
5.3
10.0
5.8
-6
-4
-2
0
2
4
6
8
10
12
Power
Generation
Highway
construction/
widening
Railfreight
traffic
Railway
earnings
Cargoat
majorports
Exportcargo
Importcargo
 Infrastructure related activities witnessed strong growth between
April-September 2016.
 The activities that registered the highest growth include export cargo
(10 per cent), highway construction/widening (9.8 per cent), power
generation (6.6 per cent), import cargo (5.8 per cent) and cargo at
major ports (5.3 per cent).

KEY PRIVATE PLAYERS
 Major projects: Mumbai–Pune BOT Project, Pune–Nashik BOT Project, Bharuch–Surat BOT Project,
Thane–Bhiwandi by-pass 4 Lane Project, Thane Ghodbunder BOT Project, Ahmedabad–Baroda NH-8, 6
laning of Agra - Etawah bypass
 Major projects: North Karnataka Expressway, West Gujarat Expressway, Noida Toll Bridge, Ahmedabad -
Mehsana Toll Road, East Coast Road, Kotakatta Kurnool Road Project, East Coast Road, Hazaribagh
Ranchi Expressway Ltd, Karnataka Toll Bridges
 Major projects: NH6 Dhankuni to Kharagpur, Sambalpur Baragarh, NH4 Belgaum Dharwad, NH-3
Pimpalgaon – Nashik – Gonde Road (JV with L&T), Jaora – Nayagaon Road, Chennai Outer Ring Road,
Modhul – Nippani Road, Indore Edalabad Road, Wainganga Bridge, Ahmednagar Aurangabad Road
 Major projects: Bandra–Worli Sea Link, Badarpur Elevated Highway Project, Delhi Faridabad Elevated
Expressway, Breakwater construction for new port at Ennore, Chennai, New Railway Line Project from
Jiribam - Tupul
 Major Projects: Hyderabad-Vijayawada Road Project, Sikkim’s Greenfield Airport, The Medanta (Medicity),
Bangalore Metro Rail Project, Upgradation of Belgaum-Maharashtra Border Section of NH-4, Elevated
Viaduct, Delhi Metro
 Major Projects: Hyderabad Metro Rail, Construction of a 6-lane bridge over the Ganges river, Mechanise
Track Laying for India's first 626 km Dedicated Freight Corridor, Monorail in Mumbai, Railway
electrification works and Rigid Overhead Contact System for the Delhi Metro, Kakrapar nuclear power
project and Srinagar Hydel Power Project, Uttaranchal
Source: Company websites, Aranca Research

Porter’s Five Force Framework Analysis
 Low – Bargaining power of suppliers is
low as the order quantity by buyers is in
bulk.
Bargaining Power of Suppliers
 Low – Threat is low as there aren’t
substitutes for transport infrastructure
like roads and railways, for airports etc.
However, if technology like Hyper Loop
becomes functional, it can possess some
threat to traditional modes of transport.
Threat of Substitutes
 Medium – In the past, competition in this
sector was high in terms of bidding for
Government projects.
 However, in the more recent years,
bidding has rationalised and the
competition between players has become
stable.
Competitive Rivalry
 Low - Threat is low due to the capital-
intensive nature of the industry; all the
capable players have already entered in
the sector. Also, there aren’t much
foreign players involved in infrastructure
projects in India.
Threat of New Entrants
 High – Buyer here is the Government;
therefore there is high bargaining power,
as it is the Government that makes the
final decision about whom the tender for
a project goes to.
Bargaining Power of Buyers
Positive Impact
Neutral Impact
Negative Impact
Source: Aranca Research

Infrastructure
STRATEGIES
ADOPTED

 The company selected countries and regions with the maximum congruence to its strengths and the most favourable
logistics. The Middle East and China have been identified as prime centres for expansion for manufacturing and projects
businesses. L&T seeks to ramp up its presence in these markets through a slew of new projects and business initiatives that
will add breadth and depth to the existing association with the industry and infrastructure of the GCC countries and other
states in the region. L&T is setting up a Modular Fabrication Yard in Oman that will build equipment for offshore applications
and for the hydrocarbon sector.
 Global sourcing policy is another key area that has given a thrust to its international strategy. With a steady rise in material
costs, the company has placed sourcing teams in China, Europe and Russia.
 To expand nuclear energy portfoilo, efforts to increase scope by offering products beyond conventional island in Nuclear
business are under way.
 Considering the National Action Plan on Climate Change targeting 15% of electricity generation from renewables by 2020,
BHEL is looking towards expanding its capacity to manufacture photo voltaic modules and cells.
 BHEL's collaborative initiatives to address the growing demand potential in Railway Transportation including Metro and
Suburban Railways include initiative with Indian Railways for setting up a greenfield Mainline Electrical Multiple Unit (MEMU)
Coach Factory in Rajasthan
STRATEGIES
Source: Company websites, Media sources, Aranca research
 GMR Energy Limited (GEL), a subsidiary of GMR Infrastructure Ltd (GIL) and TNB Repair and Maintenance Sdn Bhd (TNB
Remaco) have signed an MoU to collaborate and set up an O&M joint venture. As per the three-year MOU, GEL and TNB
Remaco will identify business opportunities in the high-potential Indian market and provide operation and maintenance
services to the power plants. hrough this JV, GEL and TNB REMACO will extend their technical expertise to the several power
plants in India. The company is planning to expand its airport vertical and consolidate the energy business along with divesting
its highway projects.
 Adani Ports and Special Economic Zone (APSEZ) Ltd aims to complete expansion of Adani International Container Terminal
Pvt. Ltd (AICTPL) at Mundra port by 2017 to create a transhipment hub for the Middle East, South Asia and India. Adani Ports
has also secured a contract from Tamil Nadu State Electricity Board for shipment of coal, adding muscle to its coastal shipping
plan.

Infrastructure
GROWTH DRIVERS
AND OPPORTUNITIES

GROWTH DRIVERS FOR INFRASTRUCTURE IN INDIA
Growth Drivers
Government
Initiatives
Public Private
Partnerships
International
Investment
Housing Development
Infrastructure
Needs

GOVERNMENT INITIATIVES DRIVING GROWTH IN THE
SECTOR
 For 2017-18, the total capital and development expenditure
of Railways has been pegged at US$ 20.33 billion.
 As per 2017-18 Budget, railway lines of 3,500 kms will be
commissioned in FY18.
 Government expressed plans to announce a
new Metro Policy by FY18.
 A new Metro Rail Policy approved in
August 2017.
 Budget allocation for road sector increased to US$ 10.07
billion in 2017-18 from US$ 8.99 billion in 2016-17.
 2,000 kms of coastal connectivity roads have been identified
for construction and development .
 Select airports in Tier 2 cities will be taken up
for operation and maintenance in the PPP
mode in the coming years.
 Road projects worth Rs 6.92 trillion (US$
107.64 billion) approved in October 2017.
 In 2017, government announced plans
to facilitate higher investment in
affordable housing.
 The National Housing Bank will refinance
individual housing loans of about US$ 3.1
billion in 2017-18.
 The National Steel Policy 2017 aims at higher spending on
infrastructure and construction through government
initiatives.
 By the end of 2017-18, high speed
broadband connectivity on optical fibre
will be available in more than 1,50,000
gram panchayats.
 In the second phase of Strategic Crude Oil
reserves, reserve capacity will be increased to
15.33 MT.
 In the second phase of Solar Park Development an
additional capacity of 20,000 MW will be generated.
Total allocation for
infrastructure in
Budget of 2017-18
stands at US$ 61.48
billion.
Source: Union Budget 2017-18, Media sources, Aranca research

AFFORDABLE HOUSING
39%
30%
27%
33%
36%
34%
34%
32%
30%
26%
22%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Source: Bloomberg, Economic Times
 In Budget 2017-18, affordable housing was given infrastructure
status.
 As of June 2017, about 69 percent of the country’s 1.3 billion people
were in prime house-buying age -- 20 to 40 years, more than any
than any other nation.
 Per capita income has grown at a compound annual growth rate of
10 percent for the past five years.
 Prime Minister Narendra Modi broadened reforms in FY17 to foster
construction and home buying under his “Housing for All”
programme, launched in June 2015. That aims to build 20 million
urban homes and 30 million rural houses by 2022. Property has also
become the most affordable in two decades.
 Approximately, 60 million new homes are expected to be built in
India between 2018 and 2024 with social and affordable housing
rising almost 70 percent to 10.5 million by 2024, exceeding the 33
percent increase in the premium market.
 In November 2017, the Government of India increased the carpet
area for houses falling under the affordable housing scheme, giving
a boost to developers having large inventories.
Visakhapatnam port traffic (million tonnes)Trend in affordability of a US$ 45,000 house

INFRASTRUCTURE DEVELOPMENT IN NORTHEAST
INDIA
Source: Budget, Economic Times, Media sources, Aranca research
 In October 2017, the Government of India announced that highway projects worth Rs 1.45 trillion (US$ 22.6 billion) would be undertaken in the
north-east region of the country in the coming two to three years.
 In August 2017, India-Japan Coordination Forum for Development of North East was formed to focus on major projects such as road and network
development, disaster management, connectivity, and electricity provision.
 With an eye on China, India is working on a slew of road and bridge projects to improve connectivity with Bangladesh, Nepal and Myanmar.
 India is also pulling out all stops to expedite the South Asian Sub-Regional Economic Cooperation (SASEC) road connectivity programme in the
backdrop of China’s ambitious One Belt One Road ( Obor).
 Government announced plans to invest US$ 6.98 billion in Northeast States.
 The North East-Agra transmission line, which is the biggest power transmission line to be built in the country in terms of capacity, is to be
inaugurated by the end of 2017. This means that cheap power from the hydro-rich North-East can now reach the central part of North India.
 As of May 2017, road infrastructure was being created in the North-East at an investment of US$ 6.2 billion, nineteen major railway projects had
been started and the electricity infrastructure is also being improved. The whole region is being developed to give impetus to tourism.
 Arunachal Pradesh was brought on the railway map of India with India’s longest rail-cum-road bridge — the 4.94-km long Bogibeel bridge over
Brahmaputra.
 Government, has also, announced plans to convert all meter gauge tracks in the northeastern states to broad gauge tracks.
 In May 2017, Mr Narendra Modi, Prime Minister of India, inaugurated India’s longest river bridge – the 9.15 kilometer long Dhola-Sadiya bridge over
the Brahmaputra river in Assam. The bridge will provide easy access to the people of Assam and Arunachal Pradesh and will improve its defence
requirements along the Sino-Indian border.

 The AAI plans to spend US$ 1.3 billion on non-metro projects over the 5 years (2013–17); mainly focusing on
the modernisation and upgradation of airports; New airports at Itanagar, Kohima and Gangtok are also
planned.
 The Government of Andhra Pradesh is to develop greenfield airports in six cities-Nizamabad, Nellore,
Kurnool, Ramagundam, Tadepalligudem and Kothagudem under the PPP model.
 Upfront subsidy has been proposed through which non-metro airports would be funded by imposing 2 per
cent levy on both domestic and international airfares.
 About 22 airports to get connected under regional connectivity scheme of AAI.
 Over 30 airport development projects are under progress across various regions in Northeast India.
 AAI plans to develop over 20 airports in tier II and III cities in next 5 years
 Around 55 new airports are required in India by 2030 with an investment of US$ 36-45 billion.
 The AAI aims to bring around 250 airports under operation across the country by 2020
 The AAI has developed and upgraded over 23 metro airports in the last 5 years
 AAI plans to develop city-side infrastructure at 13 regional airports across India, with help from private
players for building of hotels, car parks and other facilities, and thereby boost its non-aeronautical revenues.
 Airport housing will also have height restrictions to avoid interference with flight paths. They will also have to
be far from the runway and 45m above a defined level of the airport, which will allow 4-5 floors to be built
 The development of Navi Mumbai airport has been approved. The project will be developed on 74:26 per
cent partnership between MIAL and Cidco and airport’s phase 1 with annual handling capacity of 10 million
passengers each year rephrasing it from the origin
AIRPORTS INFRASTRUCTURE INVESTMENT
Metro airports
Non-metro airports
Source: Media sources, Aranca research

 At least ten Indian cities are working on metro railway projects and the government initiated a plan in 2012 to
study the feasibility of such networks in all cities with a population of more than 2 million.
 More than 500 billion rupees ($7.7 billion) worth of metro projects are underway in India and this pile will
probably grow.
 Some 200 trains cover 70,000 km everyday on 190-km-long Metro corridors in Delhi. The numbers have
increase after another 140 km addition of lines in 2016.
 A new Metro Rail Policy was announced in August 2017, which will give boost to private investments by
mandating public private partnership (PPP) component in new projects.
 A new Metro Rail Act will be enacted by rationalising the existing laws. This will facilitate greater private
participation and investment in construction and operation.
 Monorail has made its beginning in India with Mumbai being the first city in the country to have this transport
system in place.
 It took more than six years from the date of inviting Request for Qualification for MMRDA (Mumbai
Metropolitan Region Development Authority) to complete a part of the project involving a stretch of 8.26
km.
 Monorail Projects are being developed in Chennai, Pune, Thiruvananthpuram, Bengaluru, Thane, Delhi, Port
Blair, Dehradun, Chandigarh etc.
METRO RAIL AND MONORAIL INFRASTRUCTURE
INVESTMENT
Metro Rail
Monorail
Source: Media sources, Aranca research

KEY HIGHLIGHTS OF UNION BUDGET 2017-18
Source: Union Budget 2017-18
 Affordable housing has been given infrastructure status.
 National Housing Bank will refinance individual housing loans of about US$ 3.1 billion in 2017-18.
 For transportation sector as a whole, including rail, roads, shipping provision of US$ 37.46 billion has been made in 2017-18.
 For 2017-18, the total capital and development expenditure of Railways has been pegged at US$ 20.33 billion. This includes US$ 8.53 billion
provided by the Government.
 Railway lines of 3,500 kms will be commissioned in 2017-18. During 2017-18, at least 25 stations are expected to be awarded for station
redevelopment.
 500 stations will be made differently abled friendly by providing lifts and escalators. It is proposed to feed about 7,000 stations with solar power in
the medium term.
 Budget allocation for road sector increased to US$ 10.07 billion in 2017-18 from US$ 8.99 billion in 2016-17.
 Total length of roads, including those under PMGSY, built from 2014-15 till the current year is about 140,000 kms which is significantly higher
than previous three years. The Government has identified 2,000 kms of coastal connectivity roads for construction and development.
 Select airports in Tier 2 cities will be taken up for operation and maintenance in the PPP mode.
 By the end of 2017-18, high speed broadband connectivity on optical fibre will be available in more than 1,50,000 gram panchayats, under
BharatNet. A DigiGaon initiative will be launched to provide tele-medicine, education and skills through digital technology.
 A provision of US$ 115.62 million has been made for in incentive schemes like M-SIPS and EDF in order to create an eco-system which will
make India a global hub for electronics manufacturing.
 A new and restructured Central scheme with a focus on export infrastructure, namely, Trade Infrastructure for Export Scheme (TIES) will be
launched in 2017-18.
Note: PMGSY – Pradhan Mantri Gram Sadak Yojana

 The Government is making an attempt to revive and give boost to Public Private Partnerships.
 For creating an eco-system to make India a global hub for electronics manufacturing a provision of
US$115.62 million in 2017-18 in incentive schemes like M-SIPS and EDF.
 Introduction of National Steel Policy in 2017 to aim at higher spending on infrastructure and construction
through government initiatives.
 Total allocation for infrastructure in Budget of 2017-18 stands at US$ 61.48 billion.
 In November 2017, logistics sector was given the status of infrastructure, to boost investments in the sector.
 Japanese investment has played significant role in India’s growth story. Japan has pledged investments of
around US$35 billion for the period of 2014-19 to boost India’s manufacturing and infrastructure sectors.
 The Japanese government is constantly looking for investment opportunities in India.
 Asian Development Bank will provide US$ 275 million loan for a piped water supply project for rapidly
urbanising small towns, covering 3 lakh households, in Madhya Pradesh.
 With every sixth urban person globally being an Indian, the real estate and construction sector holds
significant opportunity for both global and domestic companies engaged across the value chain.
 India will need to construct 43,000 houses every day until 2022 to achieve the vision of Housing for All by
2022.Hundreds of new cities need to be developed over the next decade.
 This has the potential for catapulting India to 3rd largest construction market globally. The sector is expected
to contribute 15 per cent to the Indian economy by 2030
 The recent policy reforms such as the Real Estate Act, GST, REITs, steps to reduce approval delays etc. are
only going to strengthen the real estate and construction sector.
OPPORTUNITIES IN INFRASTRUCTURE
Government Initiatives
International
Associations
Urban Indian Real
Estate
Source: Media sources, Aranca research, Ministry of Finance

L&T INFRASTRUCTURE DEVELOPMENT PROJECTS
LIMITED (L&T IDPL)…(1/2)
Revenue (US$ million)
8.73
15.42
15.94
36.38
249.41
152.70
85.28
0
50
100
150
200
250
300
FY11
FY12
FY13
FY14
FY15
FY16
FY17
 L&T IDPL is the pioneer of the Public-Private-Partnership (PPP)
model in India.
 It is a subsidiary of the Larsen and Toubro group and was set up in
1995.
 The company has implemented major infrastructure projects across
roads, bridges, ports, airports water supply, hydel energy, metro
railway and urban infrastructure.
 The company’s revenue has increased from US$ 9.12 million in FY
2010-11 to US$ 396.45 million in FY 2015-16.
 During FY17, the company earned total revenue of Rs 572.11 crore
(US$ 85.28 million).
Source: Company website

L&T INFRASTRUCTURE DEVELOPMENT PROJECTS
LIMITED (L&T IDPL)… (2/2)
 Coimbatore Bypass
Project
 Narmada Bridge
Project
 Jaipur-Kishangarh
Expressway Project
 Second Vivekananda
Bridge Project in West
Bengal
 Bangalore
International Airport
 Panipat Elevated
Corridor Project
 Jadcherla-Kothakota
Road Project
 Palanpur-
Swaroopganj Road
 Krishnagiri-Thopur
Toll Road Project
 Vadodara-Bharuch
Tollway Project
 Chennai-Tada toll
road project
 Pimpalgaon - Nashik -
Gonde road project
 Dharma Port Project
 Gandhidham-
Samakhiali road
project
 Krishnagiri-Walajapet
road project
 Devihalli-Hassan road
project
 Hyderabad Metro
project
 Kacchigarh Port
Project
 Beawar-Pali-Pindwara
Road project
 Sangareddy –
Karnataka /
Maharashtra border
Road Project
 Jalgaon to
Maharashtra-Gujarat
border (Maharashtra)
Road Project
 Rajkot Jamnagar
Vadinar Road Project
 Halol Godhra
Shamlaji Road Project
 Pimpalgaon Nashik
Gonde road project –
India's first all women
toll plaza
1995-2005 2006-2009 2010-2011 2012-2013 2014-2016
 Canada Pension Plan
Investment Board
invests in L&T IDPL
 Sambalpur Rourkela
Road project
 Kudgi Power
Transmission Line
project
 L&T IDPL completes
development of the
longest four-lane road
project under the
Public Private
Partnership (PPP)
model
Source: Company website

YAMUNA EXPRESSWAY – A PPP SUCCESS STORY
Source: Jaypee, Yamunaexpressway, Aranca Research
 Yamuna Expressway is a 165-km, 6-lane, controlled-access expressway stretching between Greater Noida and Agra
 It is India’s longest controlled-access expressway, developed by Jaypee Group under Public Private Partnership (BOT model) for a total value of
US$ 2.3 billion
 The expressway became operational in August 2012
Salient Feature
 Length - 165.5 kms
 Number of Lanes - 6 lanes extendable to 8
 Design speed - 120 kms per hour
 Speed Limit - 100 kms per hour for cars, 60 kms per hour for heavy
vehicles
 Main Toll Plazas - 4
 Minor Bridges - 41
Yamuna Expressway

Infrastructure
KEY INDUSTRY
ORGANISATIONS

INDUSTRY ORGANISATIONS
National Highways Authority of India (NHAI)
Address: Rajiv Gandhi Bhawan, Safdarjung Airport,
New Delhi - 110003
Tel: 91-11-24632950
Address: G 5 and 6, Sector 10, Dwarka
New Delhi – 110 075
Phone: 91-11-25074100, 25074200
Fax: 91-11-25093507, 25093514
Airports Authority of India (AAI)
Infrastructure Industry And Logistics Federation of India (ILFI)
Address: P-95, South Extension Part – II
New Delhi - 110049
Phone: 91-11-41007091
Fax: 91-11-41007093
Email: dgoffice@ilfi.in, ilfi@ilfi.in
Website: www.ilfi.in

Infrastructure
USEFUL
INFORMATION

GLOSSARY
 FY: Indian Financial Year (April to March) – So FY11 implies April 2010 to March 2011
 US$ : US Dollar– Conversion rate used: US$ 1= INR54.43
 FDI: Foreign Direct Investment
 CAGR: Compounded Annual Growth Rate
 GOI: Government of India
 R&D: Research and Development
 JV: Joint Venture
 SEZ: Special Economic Zone
 BOT: Build-Operate-Transfer
 IBEF: Indian Brand Equity Foundation
 NHAI: National Highways Authority of India
 PPP: Public-Private-Partnership
 Wherever applicable, numbers have been rounded off to the nearest whole number

EXCHANGE RATES
Year INR Equivalent of one US$
2004–05 44.81
2005–06 44.14
2006–07 45.14
2007–08 40.27
2008–09 46.14
2009–10 47.42
2010–11 45.62
2011–12 46.88
2012–13 54.31
2013–14 60.28
2014-15 61.06
2015-16 65.46
2016-17 67.09
Q1 2017-18 64.46
Q2 2017-18 64.29
Year INR Equivalent of one US$
2005 43.98
2006 45.18
2007 41.34
2008 43.62
2009 48.42
2010 45.72
2011 46.85
2012 53.46
2013 58.44
2014 61.03
2015 64.15
2016 67.21
H1 2017 65.73
Exchange Rates (Fiscal Year) Exchange Rates (Calendar Year)
Source: Reserve bank of India, Average for the year

DISCLAIMER
India Brand Equity Foundation (IBEF) engaged Aranca to prepare this presentation and the same has been prepared by Aranca in consultation
with IBEF.
All rights reserved. All copyright in this presentation and related works is solely and exclusively owned by IBEF. The same may not be reproduced,
wholly or in part in any material form (including photocopying or storing it in any medium by electronic means and whether or not transiently or
incidentally to some other use of this presentation), modified or in any manner communicated to any third party except with the written approval
of IBEF.
This presentation is for information purposes only. While due care has been taken during the compilation of this presentation to ensure that the
information is accurate to the best of Aranca and IBEF’s knowledge and belief, the content is not to be construed in any manner whatsoever as a
substitute for professional advice.
Aranca and IBEF neither recommend nor endorse any specific products or services that may have been mentioned in this presentation and nor do
they assume any liability or responsibility for the outcome of decisions taken as a result of any reliance placed on this presentation.
Neither Aranca nor IBEF shall be liable for any direct or indirect damages that may arise due to any act or omission on the part of the user due to any
reliance placed or guidance taken from any portion of this presentation.

Infrastructure Sector Report November 2017

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Infrastructure Sector Report November 2017