Starting his stint as a deputy general manager of engineering with the government-owned construction major NBCC India – formerly National Building Construction Corporation – in 2005, KP Mahadevaswamy has come a long way. Ever since taking charge as Chairman and Managing Director (CMD) at the Navratna Central Public-Sector Enterprise (CPSE) in October last year, the 55 year-old has focused on expanding the company’s consultancy and redevelopment businesses, international expansion, and significantly growing revenue to Rs.250 billion over the next five years. In an exclusive interaction with CW, he outlines how he proposes to turn NBCC into a global player. How satisfied are you with NBCC’s performance? We have much to showcase for 2023. We had the privilege of constructing the International Exhibition-cum-Convention Centre (IECC), better known as ‘Bharat Mandapam’, which was the G20 Summit venue in August last year. Recently, President Droupadi Murmu inaugurated the NBCC-built historic flagpost at Rashtrapati Nilayam in Hyderabad, the tallest wooden flag post in the country. NBCC took over the stalled Amrapali Projects spread over Delhi NCR to complete and deliver them to thousands of homebuyers left in the lurch after the private builder exited the project. We also entered the agricultural infrastructure space with the signing of an MoU with the National Cooperative Development Corporation (NCDC) and National Bank for Agriculture and Rural Development (NABARD) for the world’s largest grain storage plan in the cooperative sector. NBCC will initially construct 1,469 units for grain storage using innovative building technologies across various states with an approximate value of Rs.15 billion. We currently have over 30 MoUs with various organisations in education, health, steel, ports and social sectors. Most important, we have pioneered and successfully implemented the redevelopment model. Given the housing shortage, absence of land monetisation and restrained budgetary support, a unique self-sustaining revenue generation model to redevelop existing old dilapidated government colonies and properties was taken up by us. Redevelopment of General Pool Residential Accommodation (GPRA) colonies is one of the prestigious projects of the Ministry of Housing and Urban Affairs (MoHUA), where NBCC is building houses for government employees without burdening the exchequer. Looking at the three areas of your engagement, project management consultancy, including the redevelopment of government properties, EPC and real-estate development, in what segments have you beaten expectations? We do not favour a particular area but project management consultancy and redevelopment have been most promising. Over 90 per cent of work is in those areas. Under the redevelopment exercise, NBCC is building Delhi’s World Trade Centre (WTC) in Nauroji Nagar, which will be one of the country’s largest commercial hubs with modern facilities. With 2.44 million sq ft of commercial inventory valued at `98.47 billion getting sold, over 70 per cent of the sale has been completed. Commercial space of `26.5 billion was sold in the past six months alone. We hope to sell the rest of the units shortly. In Amrapali Projects, we completed close to 16,000 units with all projects scheduled for completion by March 2025. We sold over 6,000 flats with a sale value of approximately `35 billion, which would be crucial in getting the funds required to complete the remaining units. We look forward to working on many more stressed projects under government guidance. Up to 0.5 million home buyers in the Delhi NCR and around 0.1 million in Mumbai, Pune and Bengaluru are currently affected by stalled projects. In which segments would you like to enhance focus in FY2025? NBCC has all the ingredients to become one the largest construction companies in the world. We should not only maintain our existing portfolio of government organisations but also take up work in the private sector. The redevelopment model pioneered by NBCC can be expanded to transform the face of cities, localities and societies in India and beyond, with the assurance of economic viability. The redevelopment model will be especially beneficial where land can be monetised through development. Efforts are being made to collaborate with many other public-sector enterprises (PSEs) and organisations where their land parcels can be developed. The money generated can be used by those entities to pay off their loans, while also getting the best of infrastructure. Our margins are better when we construct, market and sell properties built on land parcels owned by us and this needs to be scaled up. In this regard, plans are already afoot in Jaipur, Alwar, Coimbatore and other cities of the country. Lately, you have been emphasising a lot on expanding both revenues and profitability. How do you propose to achieve that? Our journey started in 1960 with the help of a few engineers and a small turnover of Rs.10,000. The company reported a turnover of Rs.19.141 billion and Rs.50.0626 billion on a standalone basis for the quarter and nine months ended on December 31, representing a growth of 21.59 per cent and 11.85 per cent YoY, respectively. The company earned profit before tax (PBT) of Rs.1256.6 million and profit after tax (PAT) of Rs.936.7 million on a standalone basis during the [third] quarter, a jump of 81.08 per cent and 93.06 per cent YoY, respectively. The company earned PBT of Rs.3134.1 million and PAT of Rs.2.4207 billion on a standalone basis for the nine months, an increase of 71.61 per cent and 79.63 per cent YoY, respectively. In the next financial year, we are aiming for a growth of 20 per cent CAGR as we expect a significant jump in the revenues from our ongoing redevelopment projects. In the next five years, we have set our sights on an ambitious yet achievable revenue target of around `250 billion and a bottomline in the range of Rs.20 - 25 billion. Are you also looking at any new areas for expansion? Definitely! Land monetisation is indeed a strategic approach for us to generate resources and fuel growth. We have successfully monetised surplus land parcels across India through various methods like JVs, land leasing and outright sale to generate significant revenue, enabling us to invest in new projects, expand our portfolio and strengthen our financial position. We have a land bank of around Rs.7 billion with us. We actively collaborate with government agencies and private players to unlock the potential of land parcels for mixed-use development projects. For instance, we are targeting the land parcels lying with stressed PSEs and state governments. We are ready to develop them and it will significantly take down the stress these PSEs are going through. Recently, we have got a new project of Kerala State Housing Board worth Rs.20 billion for redevelopment. Recognising the need for diversified growth, we are actively pursuing expansion in smart city projects and aviation infrastructure. NBCC has secured contracts of Puducherry and Aligarh smart cities. We are providing consultancy services to Jaipur International Airport. Earlier in 2023, an MoU was signed between DMRC and NBCC to work together in the field of infrastructure development in India and abroad. Recently, NBCC has been engaged for construction of a staff quarters residential building by DMRC as project management consultant for Bhubaneswar Metro Rail. NBCC has also ventured into irrigation works. The company has done exemplary work in Maharashtra’s Vidharbha region, where irrigation work was taken up and completed despite major challenges including land acquisition. How do you plan to expand internationally? We are ready to showcase the benefits of our redevelopment model in other countries and develop projects there. We are actively making efforts in the Asia, Africa and Oceania regions to generate new business. We recently completed world-class projects like the New Supreme Court Building in Mauritius and Mahatma Gandhi Convention Centre (MGCC) in Niger. Among others, NBCC is executing the construction of 2,000 social housing units at Hulhumale in Maldives. NBCC is also providing project management consultancy for the construction of a chancery and residential complex in Seychelles. We are exploring more housing and infrastructure projects in collaboration with the local government. We are also executing various projects in Mauritius including renovation of the Bank of Baroda Building, the construction of the New Civil Service College and the construction of Mauritius Police Academy. Work on the national archive and library buildings is expected to commence shortly. We are in discussions with representatives of the Ministry of Real Estate Development, Saudi Arabia, and National Housing Company (NHC) for collaboration and exploration of JVs in the affordable housing and construction sectors. We also expect to receive the work for providing consultancy services for the construction of a chancery-cum-residential complex in Jeddah. What steps has your company taken for sustainability? India has announced its target to achieve net zero by 2070. Therefore, NBCC has been at the forefront of sustainable construction practices by integrating green building initiatives into its projects. The incorporation of environment-friendly practices and the pursuit of certifications such as LEED and GRIHA underline our dedication to building a sustainable future. We have envisaged the ‘walk-to-work’ concept in our redevelopment projects with dedicated pedestrian walkways and cycle tracks to reduce the distance of commute and vehicular emissions. These dedicated facilities have been created at the GPRA colonies of New Moti Bagh and Kidwai Nagar East in New Delhi and have been inherently included in the planning of all upcoming redevelopment projects. Kidwai Nagar East is a ‘zero-waste’ colony. During its construction, more than 2 million bricks produced from demolition waste were used. The project boasts features like rainwater harvesting, solid waste management, sewage treatment, solar power generation, LED fixtures, solar street lights,76 per cent open area and 47 per cent lush green cover. Further, we have mandated the use of recycled water for construction in mega-value projects. What role will new construction technologies play in this regard? NBCC strives to try and invest in better technologies that help save time, money and manpower. We are embracing advanced construction technologies like aluminium shuttering, building information modelling (BIM), prefabrication, motorised painting and other automation techniques for project planning and execution. Traditionally, construction has heavily relied on cement, aggregates and water. But given current challenges such as scarcity of sand and water, traditional construction falls short of being entirely environment-friendly. Thus, new technologies present distinct advantages over conventional methods as they help optimise construction speed and ensure better quality and durability to address the demand for mass housing within specified timelines. Compared to conventional methods, they also lead to considerable reduction in the labour force. The materials used are entirely recyclable, resulting in minimal waste and reduced water consumption during execution. Moreover, lightweight structures minimise earthquake impact and enhance structural stability. - MANISH PANT