Business Strategy

Presented By:

Swaroop Das Chowdhury (2013D04)

Subhashini N. (2013D17)

Company Profile:

IRB Group• IRB Infrastructure Developers Ltd. was incorporated in 1998 to fund the capital requirements of the IRB Group initiatives in the infrastructure sector.

• One of the leading Infrastructure Development company in India in road & highway sector

Focus Vertical• Undertake development of various infrastructure projects in the road sector through several SPVs.

• The company, along with its subsidiaries, has constructed or operated and maintained around 8,000 lane kms. of road length so far and one of the major road developers in the country

• The aggregate size of all their BOT projects (both completed and under execution) is around Rs. 170,552 Million.

•Hold market share of 11.07% on the golden quadrilateral

Strategic De-risking

• Greenfield Airport Projects • Develop Real Estate

The “IRB” Group

Roads

Engineering, construction and

wind power

Airport

Real estate

21 BOT projects

Modern road makers pvt. Ltd

IRB sindhudurg airport Pvt. Ltd

Aryan infrastructure investment pvt.ltd

Hospitality Aryan hospitality pvt.ltd

Key competitiv

e advantage

One of the largest BOT

project portfolio in

the roads and highways

sector

21 BOT projects out of which 16 are operational

Strong financial track

record and relationship with leading

financial institutions

Integrated and efficient

project execution

capabilities

Professionally managed

company with qualified and

skilled employee

base

Robust order book of Rs.

115873 mm

OPERATIONAL BOT PROJECTS NAME OF THE PROJECT PROJECT COST AS

APPRAISED BY THE LENDER(Rs.Mn)

Surat dahisar 25372

Bharuch surat 6736

Tumkar chitradurga 11420

Telegaon amravati 8800

Jaipur deoli 17330

Omallur salem namakkal 3076

Mumbai pune 13016

Name of the project

Project cost

Pathankot amritsar 14453

Ahmedabad vadodara 48800

Goa/ karnataka border to kundapur

26390

Solapur yedeshi Approx.15000

PROJECTS UNDER IMPLEMENTATION

Porter’s Five Force Model

Rivalry Determinates

– HIGHA high returns project attracts 13-15 bidders. Margins are to be sacrificed

Buyers Power: Primary – HIGH;

Secondary – LOWPrimary buyer (Govt.) has high bargaining power in this monopsonistic market. Secondary buyer (end user) is mandated by law to pay tolls.

Suppliers Power – MODERATE

Raw material suppliers have reasonable bargaining power whereas subcontractors have reduced power due to in-house construction capabilities of company.

Threat of New Entrants – MODERATE

Proven track record required for project execution. Strong technical and financial capabilities are also needed.

Threat of substitutes – MODERATE

Reach of railways restricted to span of its network. MRTS has limited infiltration and span.

BCG Matrix

Question Mark

Dog

Star

Cash Cow

Hig

her

Mark

et

Gro

wth

Higher Market Share

Airports, Real Estate, Wind Power

Roads, ECC

Hospitality

GE McKinsey Matrix

Investment and Growth

(Roads)

Selective Growth

(Engg. & Constructio

n)

Selectivity

(Airport)

Selective Growth

Selectivity Harvest/Divest

(Real Estate)

Selectivity Harvest/Divest Harvest/Divest

(Hospitality)

Business Unit Strength

Ind

ust

ry A

ttra

ctiv

eness

Strong Average Weak

Low

Med

ium

H

igh

Industry Attractiveness:• Annual market growth rate• Overall market size• Historical profit margin• Current size of market• Market structure• Market rivalry• Demand variability• Global opportunities

Business Unit Strength:• Current market share• Brand image• Production capacity• Corporate image• Profit margins relative to

competitors• R & D performance• Promotional effectiveness

SWOT Analysis

• Largest BOT player- pioneer• Strong Order Book position• Hedged against rising interest rates• In-house construction Strength• On-track execution• Sturdy financials

Strengths

• A Maharashtra – centric Company

• 78% revenues from 4 BOT Projects alone

• Low investments in R&D

Weaknesses

• Growth in Infra industry• Road – priority sector• Large ticket size road projects on the

anvil• Focus on PPPs• Venture into Airport Development and

Real Estate• Economic growth picking up

Opportunities• People’s perception• Land acquisition• Interest rate risk• Price escalation• Regulatory risk• Increased competition and aggressive

bidding• Project delays• Traffic dependent on economic growth

Threats

IRB

Speeding Ahead..

Pan –India presence

Enhancing and evolving capabilities

Innovation and R&D

Nation-building by strategic venture into infra sectors

The Strategy

To build upon our competitive strengths in the road infrastructure sector to become a market leader in India that is, completing the order book of INR 115873mn in an efficient and timely manner by strengthening our execution capabilities, adding to our existing pool of talented managers, engineers, and facilitating continuous learning with in-house and external training opportunities, and achieving this by continuing to focus on pursuing funded construction contracts, particularly EPC contracts, as such contracts enable us to move up the value chain to become the principal contractor on our funded construction projects.

Thank You!