Takeaways from the NESCO AGM:
Construction on IT Building 4 is going in full swing. Contractors for the project, Larsen and Toubro, have deployed 450 people on the site and the number will go up to 1000 in the coming months as more storeys are constructed. Work is going 24/7, the supervisors at the site told me.
Concrete for the project is being manufactured on the site and there were long queues of trucks waiting to pour the ready-mix where required.
Three storeyed basement is already completed and work is going on the ground floor. According to management they have got the permissions to construct all the 14-storeys in one go from here on. The building is due to be completed and ready for fit outs by end-2017.
Once completed, the building will have 9 lakh sq ft carpet area and will be leased out on the basis of 12 lakh sq ft – it will be almost four times IT Building 3.
The company has so far spent Rs 240 crores towards the construction of IT Building 4. Much of it has been spent on purchasing additional FSI for construction of the new building.
The management announced that it would demolish and rebuild much taller structures in place of IT Buildings 1 and 2 following changes in Maharashtra government's Development Control rules.
Chairman Sumant Patel revealed that NESCO stands to benefit immensely from the new development control rules unveiled by the Maharashtra government this month.
The government has allowed FSI of 2 instead of 1 earlier for IT/ITES buildings. For exhibition centres FSI of 3 instead of 1 is now allowed.
Company management is meeting with architects in the next few days to prepare a detailed plan for the entire complex following the new DC rules.
According to Chairman Sumant Patel, redevelopment of the Exhibition
Centres will begin in one to one-and-a-half years – ie after the completion of IT Building 4.
Area of the exhibition centres could go up to 50 to 60 lakh sq. ft. if required, Mr Patel said.
During the post-AGM interaction with the management I got the feeling that the company is keeping an eye out on the Dhirubhai Ambani Convention and Exhibition Centre coming up at the Bandra Kurla Complex. As of now very little information is available on this new entrant even among the market players.
With the number of footfalls in the NESCO complex all set to explode, the management is betting heavily on NESCO Hospitality Ltd. There are food courts in the premises and ultra-modern kitchen is in the process of being constructed. Permissions are still to be obtained, so not much info on the planned kitchen.
Regarding Indabrator, management is bullish about the revival in the capital goods sector. Mr Patel said company has a very good order book (he did not give details) which would grow further in the coming year. He further said profits from Indabrator could go up by 50 per cent in the current year.