Lanco Infratech - Investor Presentation 09

8/13/2019 Lanco Infratech - Investor Presentation 09

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Lanco Infratech

Investor Presentation

September 2009


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Agenda

1 Company Overview

ower us ness

3 Construction and EPC Business

n ras ruc ure us ness

5 Property Development Business

7 Experienced Management Team

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Agenda

1 Company Overview

ower us ness





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Lanco Infratech A Leading Integrated Infrastructure Player

Division of Lanco Infratech

Construction & EPC Power Infrastructure Property Development

Special Purpose Vehicles

Executed projects worthUS$1.3bn over last 3 years(FY07 - FY09)

Order book of US$2 bn

5 plants with approx. 511 MWcapacity under operation

9 plants with approx. 3,913MW capacity under

construction 2 plants with approx. 3,960

Developing approx. 163 km ofNational Highways inKarnataka

Bidding for constructing and

operating Airports, Metro RailTransport Systems and

4mm sq ft under developmentin Hyderabad, India

Developing Lanco Hills, mixedused space of high rise

residential structures, IT SEZoffice space, shopping malls

MW capacity underdevelopment

Largest private player inpower trading with 12.4%market share

,operation of roads, ports andredevelopment projects

Revenues EBITDA PAT

350

690

1,292

500

1,000

1,500

(US$mm)

98

149

189

50

100

150

200

(US$mm)

40

60

75

25

50

75

100

(US$mm)

5

32

-

FY06 FY07 FY08 FY09Note:

1 This presentation assumes an exchange rate of US$ / INR =47

2 Financial year ending March 31

3 mm indicates million

4

-

FY06 FY07 FY08 FY09

4

-

FY06 FY07 FY08 FY09


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Pan India Presence

Plants under construction

Plants under development

Coal Based

Teesta

Lanco Uttaranchal

Plants under operation


Vamshi - I

Vamshi - II

Vamshi Industrial

Lanco Green

GasGurgaon

Amarkant ak I & IIAmarkantak III & IV

Anpara



Wind

Chitradurga Konda all i - I

Kondapalli - II

Babandh

Lanco Hills

Property development

Road development

Registered off ice

HyderabadCoal mine

Udupi

81 km Bangalore Hoskote Mudbagal82 km Neelamangla Devihalli Tamil Nadu Wind

Adminis trati ve o ff ice

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Strong Push to Drive Infrastructure Growth

Infrastructure spending (2007-2012)

Government is targeting investment of >US$400 bill ion during 2007-2012

Total - US$437bn

Demand / supply gap for power

1,000 12%160 157

579 625

666 689632 691739

591

548

400

600

800

(bnkwh)

6%

9%

0

40

80(US$

bn)

79 68 65 55

5119

9 6 5

-

200

FY05 FY06 FY07 FY08 FY090%

3%

Re uirement Availabilit Deficit

Powe

r

Roa

dsandB

ridges

Telec

om

Railw

ays

Irriga

tion

Water/

sanit

ation

Ports

Airport

s

Storag

eGa

s

Central Govt. State Govt. Private sector

Commentary

Recent election mandate provides a stable coalitiongovernment which may focus on infrastructure

Per capita consumption of electricity

18.4

14.215

20

/year)

Source: Planning commission (XIth five year plan) Source: Central Electricity Authority (CEA)

Positive regulatory reforms remain a key driver of growth

Power, airports and ports are likely to be the fastest growthsectors in the foreseeable future

7.46.4

2.3 1.70.6 1.2

-

5

10

(Thousandkw

h

7

Source: UNDP, Human Development Indicators, 2007/08

In the XIth five year p lan (2007-2012), the Government targets to add 78,700 MW of generating capacity

countries


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Agenda

1 Company Overview

ower us ness





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Power Deficit Scenario

582

63 1

1,000

2004

2006

2012

Per Capita Consumption Growth (Units)Planned Vs. Installed Capacity Xth Plan (MW)

30,000

18

35

84

131

23 8

40 8

1950

1960

1970

1980

1990

2001

58% growthin XIth Plan4,481

2,691

6,676

3,553

,

7,33012,790

1,1801,3008,742

1,231

700

1,170

10,000

20,000

(MW

)

.

Pro ected 2012 eak Ener Deficit Power Deficit 2009

Source: CEA

,0

Hydro Hydro Thermal Thermal Nuclear Nuclear

Central sector State sector Private sector

(Planned) (Installed) (Planned) (Installed) (Planned) (Installed)

Source: CEA

15.9 %

(22.1)%

(23.7)%

(24.3)%

P N

UP

M H

GJ

10.6 %

(20.9)%

(21.4)%

(9.8)%

PeakDeficit States EnergyDeficit

1.63.5 3.7

15.0

2.7

15.816.0

5.0

10.0

15.0

20.0

(4.8)%

(6.2)%

(7.6)%

(10.0)%

(13.0)%

KN

T N

A P

M P

KL

(6.0)%

(7.9)%

(6.8)%

(17.2)%

(11.8)%

(9.7) (9.3)

(5.0)(5.8)

(0.7)

(4.4)

(10.4)

(4.5)

(15.0)

(10.0)

(5.0)0.0

North India West India South India East India North-East

India

9(0.9)%

(2.0)%

(3.2)%

(3.6)%

OR

CH

RJ

WB

(1.5)%

(2.6)%

(1.1)%

(3.2)%

Source: Ministry of Power Source: CEA

Winter Peak Monsoon Peak Summer Peak


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Presence Across Value Chain De-risking the Business

Fuel (Coal mining)Construction and

EPCGeneration and O&M Trading

Transmission andDistribution

Integrated presence across value chain capturing value addition across the businesses

Captive coal mine

allocated by Govt.of India to Lancoand five others

Coal to be usedfor portion of

5 completed

projects withcapacity of 514MWand 3,913MWprojects underdevelopment

5 operating

projects withcapacity of511MW and 7,873MW projectsunder

Largest private

sector player inIndian powertrading marketwith approx. 12%market share

Strategy includes

possibleexpansion intotransmission anddistribution

needs of theOrissa based2,640 MWBabandhpower plant

Strong engineeringcapability andresources spanningfeasibility studies,front-end design and

complete detaildesign with over

Generationactivities includeconventional andnon-conventional

sources of energylike coal, hydro

Covers all the fiveregions of India bycovering32 utilities from19 States

Traded 2,841mm

10 years ofexperience in designand development ofPower Projects

Handles globalsuppliers selectionand sourcin of

and wind

ended March 31,2009

Bought 5% stakein the IndianEnergy Exchangefloated by

diverse materialslike high-pressurefabricatedequipment, skids,electricaland instrumentations stems

Financial

Technologies Ltdand PowerTradingCorporation

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Focused on Power Sector with a Pan-India presence

Location of power plants Regional split of power plants1

One of the early private sector entrants in the field of power generation wi th first plant set up in 2000

Central

22.9%East

Vamshi HydroVamshi IndustrialLanco Green

Teesta

Lanco Uttaranchal

North

.

Fuel diversification of power plants1Amarkantak I & IIAmarkantak III & IV

Anpara

17.2%

South

22.4%

Konda alli - I

BabandhWind

0.1%

Gas

10.2%

Hydro

8.9%

Chitradurga

Kondapalli - IIUdupi


Plants under construct ion

Plants under development

coal68.7%

Imported coal

12.1%

Capacity (MW)

511

3,913

3,960

8 384

11

Note:

1 After installation of all current projects including projects under development

Aban

Tamil Nadu Wind


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Mature Power Projects Provide Visibility into Earnings

Projected capacity addit ion

FY13

FY14

Babandh (2

Lanco is expected to increase its power generation capacity sign ificantly in next 2 years

FY12

Uttaranchal I

Amarkantak III

Babandh (2units)

Teesta

Uttaranchal II

un s

Amarkantak IV

FY10

Amarkantak I & II

Vamshi

Budhil

Udupi II

Anpara

6,404MW

8,384 MW

Current

Kondapalli II

Udupi I

3,772 MW

3,848 MW Kondapalli I

Aban

Chitradurga

Tamil NaduWind

1,994.5 MW

VamshiHydro

12

511 MW


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Project Status UpdateProjects under operation

Plant Fuel

Capacity

(MW)

Total cost

(US$mm)

Kondapalli I Gas 368 241

Aban Gas 120 93

Chitradurga Wind 3 3

Tamil Nadu Wind Wind 10 10

Vamshi Hydro Hydro 10 12Total 511 359

Projects under constructio nGovt. Financial Budgeted

Plant Fuelapproval

statusclosurestatus

Capacity

(MW)cost

(US$mm)

PPA

(Years)

Estimated

completion Current status

Amarkantak I Coal Y Y 300 275 25 Q2 FY101 Synchronization with grid completedKondpalli II Gas Y Y 366 253 Merchant Q2 FY10 / Q4 FY103 Gas turbine generator placed on the foundationVamshi Industrial Hydro Y Y 10 12 35 Q2 FY10 / Q3 FY10 EOT Crane commissioned

Amarkantak II Coal Y Y 300 285 25 Q3 FY10 Turbine, generator erection currently underprogress; Boiler Hydro test completed

Udupi I & II Imported Coal Y Y 1,0152 923 25 Q3 FY10 / Q1 FY11 Turbine, generator erection currently underprogress, Boiler Hydro Test Completed

Lanco Green Hydro Y Y 70 89 35 Q2 FY11 Pressure shaft excavation completeAnpara Coal Y Y 1,200 729 29 Q4 FY11 Boiler drum lifting completedLanco Uttaranchal I & II Hydro Y Y4 152 221 Merchant Q4 FY12 / Q4 FY13Teesta Hydro Y Y 500 638 35 Q4 FY13 Construction commenced in May 2007 and Right

bank and Left bank stabilization done

Total 3,913 3,425

Projects under development

Babandh Coal (Partly Owned) N N 2,640 3,370 Part PPA Q4 FY13 / Q1FY14 MOU signed for 1,320 MW and land acquisition inprogress

Amarkantak III & IV Coa N N 1,320 1,685 Part PPA Q4 FY13 / Q1FY14 MOU signed with Govt. of Chattisgarh;Total 3,960 5,055

13

Note:

1 Currently under litigation

2 1,200 MW upon receipt of approval

3 Q2 FY10 is for open cycle and Q4 FY10 is for combined cycle

4 For 76 MW Financial Closure is done


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Agenda

1 Company Overview

ower us ness





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In-house EPC Reduces Execution Risk/ Enhances Margins

Revenue contribut ion1 (FY09) FY09 EBIT margin comparison with other businessesEBIT contribution (FY09)

In-house EPC enables Lanco to complete projects on an accelerated basis

US$1.3bn US$166mm16%

Others.

11.8%

5.8%8%

12%

Pow er

39.1%

Development

2.3%

0.3%

Development

1.0%

Pow er

36.7%

0%

4%

EPC Power Property

DevelopmentConstructionand EPC

Constructionand EPC62.3%

Capability to take up more projects

Approx. 114 km Veeranam water supply transmission pipelineconstructed along with JV Partner, Punchak in Tamil Nadu

Balance of Plant of approx. 368 MW LANCO Kondapalli Power

List of projects executed

Lanco undertakes the EPC business of its planned projectsand profits earned during the construction period can beinjected into new projects in the form of equity contribution

.

Project in Andhra Pradesh Balance of approx. 120 MW Aban Power Project in Tamil Nadu

825 bed Asvini Hospital for Indian Navy at Colaba, Mumbai

Four laning of National Highway 31 in West Bengal

Construction of 1st phase of 100 bed hospital, college and hostel

The business model also enables the company to quotemore aggressive tariffs in the competitive bidding processthereby increasing the likelihood of getting new projectswhile maintaining acceptable profit margins

Note:

15

., ,

Construction of Railway Offices at Koparkhairane Railway Station1 Before elimination of inter segment revenues


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Agenda

1 Company Overview

ower us ness





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Leveraging Construction Expertise to Build Infrastructure Business

Awarded two National highway projects in Karnataka

Lanco has moved into selective infrastructure projects to leverage its EPC experience

Approx. 81 km stretch connecting Bangalore Hoskote

Mudbagal

A rox. 82 km stretch connectin Neelaman la Devihalli

Budgeted project cost of US$288mm

oncess on per o s o years an years respec ve y ur ngwhich toll will be collected

Construction under progress and expected to be completed by

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Agenda

1 Company Overview

ower us ness





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Property Development - An Opportunistic Play

Lanco Hills is the groups foray into property development, located in Hyderabad, spread over 100 acres andcomprises residential space, offi ce space, IT SEZ, shopping mall and two hotels with US$292mm of capitalexpenditure already incurred

Lanco Hills

Residential Developing 12 residential towers with construction on 6 towers in first phase

Construction in progress with possession of apartments to commence in Q4 2010

Office space

ce comp ex w u -up area o . mm sq

Constructing SEZ space with completion target of 2012

Constructing office space with completion target of 2010

Shopping mall Plans to build a 2.5mm sq ft of a shopping mall

Construction will be in phases

Hotels Tied up with Grand Hyatt for a 400 room, 5 star deluxe hotel

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Agenda

1 Company Overview

ower us ness





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Steady Growth History

1,2921,500

189200

Revenues EBITDA

350

690

600

900

,

(US$mm

)

98

149

100

150

(US$mm)

32

-

FY06 FY07 FY08 FY09

4

-

FY06 FY07 FY08 FY09

PAT Power projects capex and debt overview (As of March 31, 2009)

60

75

75

100

m) 3,000

4,000 3,425

2,790

4

40

-

25

50

(US$m

,

1,609

1,1811,806

0

1,000

2,000

(US$m

m

21

FY06 FY07 FY08 FY09

Source: Company filings

Capex Debt

Incurred Remaining


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Agenda

1 Company Overview

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Experienced Management Team

L Madhusudhan RaoExecutive Chairman

M. Tech; MS (Wayne Univ)

J Suresh KumarChief Financial Officer

Chartered Accountant

SC ManochaCEO - EPC

Mech. Engineer & Mgmt Graduate

Joined Lanco in 1989

Guided the company

through its crucial stagesof growth and mergers

Over 14 years of experience in thefinancial services sector includingM&A, corporate restructuring and

fund raising

Previously employed withJM Morgan Stanley Prasad Kandimalla

Director & Chief Executive Officer Renewable Energy, Carbon Assets

35 years experience in RelianceEnergy, Maithon Power, UtilityPowertech, L&T, BHEL and

ISGEC John Thomson

G Bhaskara RaoExecutive Vice Chairman

ME (Machine Design), B.E.(Production) from IISc

25 years of experience inconstruction industry inroect lannin

Director and Chief Executive Officer,Lanco Kondapalli

Chartered Accountant andCompany Secretary

28 years of experience from diverseindustries across companies

Masters Degree and Specialisationin Energy & Systems

Experience in financial services, IT,Management Consultancy spanningseveral countries

and implementation

G Venkatesh BabuManaging Director

Chartered Accountant andCost Accountant

K Raja GopalChief Executive Officer and Director,Lanco Amarkantak

ME, MBA (Marketing)

22 years of experience inproject development and various

Chief Executive Officer, Lanco Hills

Post graduation in EnvironmentEngineering, B.E. (Civil)

Previous work experience withIVRCL, Hyderabad MetropolitanWater Supply & Sewerage Board

15 years of experience inCommercial Banking,Corporate Advisory,Mergers & Acquisitions,Project Finance and EquityCapital Markets

functional disciplines of

manufacturing and power industries

26 years of experience

Pradeep LenkaChief Executive Officer-Thermal,Lanco Infratech Ltd

ME, 30 years of experience in

S M RoyCEO - Construction Division

Mechanical engineer and postgraduation degree in Business

23

power projects as OEM and also asIPP developer

Executed more than 15 projectsin BHEL

management from XLRIJamshedpur

40 years of experience


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Documents

Lanco Infratech - Investor Presentation 09