Gammon India, the construction firm famed for building the ‘The Gateway of India’ in 1919, faces financial pressures compelling the monetization of its real estate holdings due to existing cash flow issues.
The company encountered difficulties, reporting a financial downturn during the third quarter of this year. Company officials attributed these losses primarily to elevated financing expenses and a decrease in sales. This combination of factors has significantly impacted the company's financial standing.
Currently, Gammon India is burdened with approximately Rs. 3200 Crore in debt. Key stakeholders include ChrysCapital and JP Morgan, holding shares of 9.84% and 3.01%, respectively.
Gammon India, with its long-standing presence of over a century in India's civil engineering domain, prides itself on being among the country's oldest and largest firms in this sector. The construction of landmarks like 'The Gateway of India' stands as a testament to the company's historical significance and engineering prowess.
Beyond real estate and infrastructure, Gammon India has diversified into energy production, maintaining a robust presence across hydro, nuclear, and thermal power sectors.
Furthermore, Gammon India specializes in the design and construction of advanced bridges and overpasses, with operations extending to metro rail developments, typically undertaken on a contractual basis.
Presently, a substantial project for ISKCON is underway, involving the construction of a temple complex and a modern cultural center in Sri Mayapur, West Bengal.
Gammon maintains international ties with entities like Franco Tosi Meccanica and SAE Power lines, and is open to new partnerships for its Italian business to alleviate financial burdens.
Lanco Infratech, another significant infrastructure player, is also strategizing to bridge its debt gap, which is around Rs. 23000 Crore.
The real estate sector has seen a decline in sales, compounded by reduced bank lending and increased debt. Indiabulls Real Estate reportedly planned to divest its stake in Indiabulls InfraEstate for approximately Rs. 800 Crore, engaging in discussions with Xander Group.
In related transactions, HDFC PMS divested shares worth Rs. 250 Crore in Mulund Projects. Among other transactions, DLF sold a prime plot in Mumbai, acquired by the Lodha Group for Rs. 2700 Crore.