Asked about the unique features, Tulsyan says: “GRIL historically was (and is) an income tax paying company, paying its suppliers in time (and sometimes even in advance) and the way they do business with simplicity and honesty is the hallmark of GRIL.”

“IDFC, too, invested Rs30 crore in GRIL and made handsome gains of R68 crore after about five years, when we bought back the share,” says Vinod. MOPE plans to exit soon, as and when GRIL embarks on its IPO.

Infra watchers say that, with a small and humble beginning in 1995, GRIL has established a storied history of engineering excellence across segments, such as road EPC projects, Hybrid Annuity Model (HAM) projects, BOT projects, highways, bridges, culverts, flyovers, airport runways and railways, delivering over Rs6,000 crore in revenues and going strong.

Backward integration has been one of the key strengths for GRIL, including manufacturing bitumen emulsion, thermoplastic road marking paint and road signage, fabrication and galvanisation of metal crash barriers, high mast pole and lightening poles, OHE and PEB fabrication, all of which is helping them to deliver projects well ahead of time. 

“The company, having been incorporated in December 1995, has gradually increased its execution capabilities,” says Ajendra Agarwal. “For example, one of the first road projects we executed was for the public works department, Rajasthan, in 1997, with a bid project cost of Rs265 crore, whereas the project recently awarded by NHAI, the Vadodara-Mumbai expressway, involves an expense of Rs2,747 crore,” he says. 

“We don’t get into business unless it is clean and we do not compromise on ethics at any cost,” says Tulsyan. Machinery and equipment valued at over Rs18 crore has been burnt at Hazaribagh in Naxal-hit Jharkhand, but GRIL did not compromise with the extortionists. 

GRIL began its journey outside Rajasthan with Shillong bypass and quickly spread to Manipur, Meghalaya, Bihar, UP, Andhra Pradesh. “You cannot remain in one place as roads take you to other states,” says Vinod as the company bid for projects in Kerala and Tamil Nadu too. GRIL is also exploring opportunities in J&K.

India has the second-largest road network in the world, spanning 6.5 million km. Road transportation, the most frequently used mode of transportation in India, accounts for about 86 per cent of passenger traffic and close to 67 per cent of freight traffic. Although Indian national highways span nearly 1,36,440 km, constituting just 2 per cent of road length, they accounted for about 40 per cent of total road traffic in fiscal 2020. The secondary system of roads comprises state roads and major district roads, which accounted for the remaining 60 per cent of traffic and 98 per cent of road length.

“Roads bring in prosperity,” explains Vinod. “The success of PMGSY can be seen from the flow of two-wheelers, cars and other mean of transport. Connectivity is no longer the issue. We are talking about better roads now.” The upcoming Delhi-Mumbai Corridor, for instance, is bound in bring in another industrial revolution.

Hybrid annuity model

CRISIL Research expects private construction investments in national highways to increase two times to Rs1.5 trillion over 2021-25, compared with the previous five years. This is expected to be mainly through the hybrid annuity model, as the build-operate-transfer (BOT) toll model may have only a few takers. 

Is all business hunky-dory? “Some projects, which I shall not name, and which won merely on the basis of L-1 in government tenders keep languishing,” says Vinod. “The government suffers if projects won on the basis of purely L-1 are delayed due to the contractors’ inability to complete them. Bad roads lead to accidents, deaths and everybody suffers.” Tulsyan concurs and says the government should also look at the contracting companies’ capability, background and quality and maintain a fine balance “It is after all, the tax payers’ money with which we work,” Vinod points out. “Even the poorest of the poor pays taxes when they buy something.” Hence, he says: “We must work with sincerity.”

Over the years, GRIL built its capabilities, despite the business roller-coaster. The ISO 9001: 2015 certified company has over 15,000 employees, six in-house manufacturing facilities with captive transportation at Udaipur, Guwahati, Lucknow and Ahmedabad, and 6,500 construction equipment and vehicles. As on 31 December 2020, the aggregate gross block value of the company’s property, plant and equipment was Rs1,774 crore.

The company undertakes its construction business in an integrated manner, as it has key competencies and resources in-house to deliver a project from conceptualisation till completion. “Our in-house integrated model is facilitated by the timely transportation of key raw materials like bitumen and diesel from our manufacturing facilities and refineries to project sites, for captive consumption by tankers owned by us that are fitted with GPS tracking devices, which we believe reduce pilferage and adulteration,” says Vinod.

“While we continue to focus on development and construction of road projects, as part of our growth strategy, we intend to diversify into, and will continue to bid for, projects related to the railways sector,” explains Ajendra. GRIL aims to consolidate its position in the infrastructure sector and effectively leverage its experience in executing EPC projects. 

The winner of several awards of excellence, GR Infra Projects has earned high appreciation from Air Force station, Jodhpur, for completing the resurfacing of a runway in a record 10 months – eight months ahead of schedule. “Leadership and staff at GRIL displayed considerable discipline and professional competency and ensured that high-quality standards were maintained while adhering to security and flight safety norms,” says SB Deo, Air Commodore & Air Officer Commanding of the Air Force Station.

Investments in highways 

Despite lockdowns and labour-related issues, a faster-than-expected recovery in construction of national highways, coupled with a policy push and mitigating steps by the government, would sustain the roads & highways sector through the pandemic. CRISIL Research estimates investments in national highways will increase nearly 1.7 times over the next five years compared with that of 2016-20. These investments in national highways will grow 8-10 per cent in 2020-21 on the back of a faster-than-expected recovery in the pace of national highway construction (especially in October) and a large share of high value expressways being constructed.

CRISIL Research estimates that awarding of tenders by the NHAI could touch 3,700-4,200 km in fiscal 2021. “We expect 3,500-4,000 km to be awarded in 2021-22 and an average of 4,000-4,500 km over 2023-24 to 2024-25, due to a strong pipeline of projects under Bharatmala,” the agency says. The NHAI awarded 3,211 km up to March 2020, with only 30-35 per cent of projects under HAM, nil under build, operate-transfer (BOT) and the rest under engineering, procurement and construction (EPC) mode. The authority had already awarded over 2,100 km up to October, achieving more than 45 per cent of its target of 4,500 km. The NHAI has also floated tenders for about 7,000 km over the past six to seven months.

GRIL has the rare distinction of completing 100-plus projects since December 2006 across 15 states – having completed most of them much before the deadline and getting bonus payments of over Rs247 crore on that score. GRIL plans to go public and has just filed its Draft Red Herring Prospectus with the market regulator SEBI, targeting to raise about Rs1,000 crore. The issue is an offer for sale of over 10 million equity shares with a face value of Rs5 each by promoters and investors.

The promoter entities include Lokesh Builders, Jasamrit Premises, Jasamrit Fashions, Jasamrit Creations and Jasamrit Construction. The investor part includes MOPE’s India Business Excellence Fund I and India Business Excellence Fund, apart from Pradeep Kumar Agarwal’s share. The company will not receive any proceeds from the issue. The price band and other details will be finalised later.

“Today, L&T is known as the torch bearer of the EPC industry. I do see a clear possibility of GRIL emerging as the next L&T,” says Tulsyan, pointing out that the Vinod Agarwal-led company has all the characteristics, capabilities and business culture to be qualified for this feather in its cap.

Meanwhile, on the CSR front, the company has created the GR Infra Welfare Trust to carry out CSR activities with an emphasis on four areas – animal welfare and wild life sanctuary, healthcare, education and cultural as also rural development. It has built a community health centre at Sahawa, which has been ranked as Rajasthan’s number one in a Union government survey. It has decided to construct a college building at Sahawa, which the government will manage. The company has also undertaken the renovation and installation of medical equipment and maintenance of a children’s hospital, The Maharana Bhupal Government Hospital, in Udaipur.