>MBL INFRASTRUCTURE LIMITED- IPO NOTE (SMC)

Business Overview
Incorporated in 1995, MBL Infrastructures Ltd is engaged in the construction and maintenance of roads and highways, industrial infrastructure projects and other civil engineering projects for various government bodies and other clients.

The company has a pan India presence and executed a number of projects in the states of West Bengal, Madhya Pradesh, Uttarakhand, Orissa, Maharashtra, Rajasthan, Assam, Uttar Pradesh, Bihar, Delhi etc.

The company is focused on the following sectors:
1. Highway Construction
2. Road Maintenance
3. Industrial Infrastructure Projects
4. Other Civil Engineering Projects
5. BOT (Build Operate Transfer) Projects

The company is engaged in steel trading and waste management (ferrous scrap and slag recycling) at major steel plants. Moreover, the company has ready mix concrete (“RMC”) and bitumen divisions to ensure adequate and timely supply of high quality of RMC and bitumen mixes.

MBL has completed the execution of BOT project of 114 kms. of Seoni- Balaghat- Rajegaon State Highway under the Public Private Partnership (PPP) arrangements. Company also completed the work of construction of additional length of service road and side drains from 146-156Km including 2-lane flyover on Guwahati Bypass section of NH 37 in the state of Assam.

MBL owns a fleet of equipment, including hot mix plants, sensor pavers, tandom rollers, soil compactors, stone crushers, tippers, loaders, excavators, motorgraders, concrete batching plants, transit mixers, concrete pumps, reversible drum mixers, dozers and cranes.

MBL has bagged five contracts relating to the Common Wealth Games which are mentioned below:
1.Construction of Road under bridge on Auchandi road, connecting to G.T. road to Badli Industrial area (on Delhi – Ambala Line) for Municipal Corporation of Delhi (MCD)

2. Construction of Road under Bridge on existing railway line level crossing on Narela Lampur road at Narela for MCD

3. Street Scaping & beautification of MCD roads around Tyagraj Sports Complex, Siri Fort complex and RK Khanna Tennis Stadium

4. Street Scaping & Beautification of MCD Roads around Dr. Karni Singh Shooting Range and JLN Sports complex

5. Street Scaping & Beautification of Various roads around IGI Stadium under PWD Zone M-1

Competitive Strengths
■Integrated business model
The integrated structure enables the company to bid for BOT projects,- from tendering for the project to the collection of tolls, and operate the project on a profitable basis.

■Own fleet of construction equipment
The company owns most of the construction equipments like hot mix plants, sensor pavers, tandom rollers, soil compactors, stone crushers, tippers, loaders, excavators, motorgraders, concrete batching plants, transit mixers, concrete pumps, reversible drum mixers, dozers, cranes etc and shuttering and centering plates. This gives the company competitive advantage like lower cost & rapid mobilization.

■Pan India presence
The company has a national presence and is currently executing projects in 9 states across India. The capability to simultaneously execute projects at geographically diversified locations, gives the company the ability to wider market access.

■Availability of raw material at cheaper cost
Having captive capability ensures availability of the bulk raw material at a cheaper cost & enables the company to control and ensure the quality and timely delivery required for the projects.

■Operational BOT project
The operational BOT project is providing steady cash flows to the company. The toll revenue for the fiscal ended March 2009 was Rs 7.80 crore and in August 2009 the monthly revenue stood around Rs 66.72 lakh.

Business Strategy
■High potential projects
MBL intends to concentrate on projects where there is high potential growth and competitive advantage. The company intends to be associated with larger, technically more complex projects by leveraging their prior experience in infrastructure projects and equipment base. The company believes that high entry barriers for bidding of large order size projects make this an attractive sector to participate in.

■Joint Venture with other infrastructure companies
The company continues to develop and maintain strategic alliance and form project specific joint ventures with regional players whose resources, skills and strategies are complementary to the company's business.

■ Operate BOT and Annuity projects
The company intends to take up annuity projects or contracts on BOT as they provide higher revenue & operating margins due to the added overall control of the project costs that can be exerted by the contractor. MBL believes that such projects will become increasingly more prevalent in the coming years because of the government's reliance on the public-private partnership (PPP) model.

■Mining of minerals
The company may enter into mining of minerals such as iron ore, coal etc in the future.

To read the full report: MBL INFRASTRUCTURE