Hindustan Construction Company (HCC), recognized as a prominent player in the construction sector, is undergoing a significant transformation by separating its real estate, infrastructure, and investment operations into distinct fully-owned subsidiaries. This restructuring is aimed at granting these high-growth ventures a focused identity and dedicated management.
Recent declarations from HCC officials confirmed the establishment of two subsidiaries: HCC Real Estate and HCC Infrastructure, while HCC Capital is currently being developed. The firm plans to concentrate its efforts on vast construction and engineering projects.
Ajit Gulabchand, chairman and managing director of HCC, stated that the company has a diverse presence across several infrastructure segments. He remarked, “We feel the restructuring will help us focus on the untapped segments.” Over the past few years, HCC has experienced robust growth across its operational segments.
Gulabchand further noted that the number of projects under execution has surged dramatically. Despite this, the majority of growth has originated from the construction industry, with scope for advancements in the real estate, engineering, and infrastructure sectors yet to be fully capitalized.
On Wednesday, following this announcement, HCC's shares witnessed a 2.7% increase, reaching Rs 132.50 on BSE. The newly formed subsidiaries will operate with individual CEOs and are expected to bid for projects specific to their domains. They will also independently raise funds and establish joint ventures.
HCC Infrastructure plans to direct its efforts towards build-own-operate and transfer (BOOT) project opportunities within roads, hydropower, as well as airport and port developments. Notably, HCC has emerged as the largest contractor for the National Highways Authority of India, having constructed over 490 km of road in the fiscal year 2007/08, topping over 500 km in the previous year. Additionally, HCC Infrastructure intends to participate in major airport and hydropower projects.
Conversely, HCC Real Estate will undertake various real estate initiatives; however, its flagship Lavasa project near Mumbai will remain a distinct entity. A recent report from CLSA highlighted an acceleration in India’s infrastructure development, supported by enhanced private sector engagement and improved financial health in government and public enterprises.
HCC Real Estate is geared towards the construction of commercial centers, service apartments, and hotels. Current projects in development include the IT park named ‘247 Park’, encompassing a massive 1.9 million square feet, alongside two slum rehabilitation schemes located in Mumbai. Moreover, plans are in motion to create townships in Mumbai, Nasik, and Nagpur.
With aspirations to invest in and manage select infrastructure projects in the future, HCC is channeling its investment strategy through HCC Capital. While it continues its construction operations, HCC aims to enhance its engineering, procurement, and construction (EPC) capabilities and is exploring potential ventures in the winery sector, having acquired 400 acres of land in Nasik. For the fiscal year ending March 31, HCC reported a turnover exceeding Rs 3,000 crore along with a net profit reaching Rs 108 crore.