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IVRCL Ltd. BSE 38.70 -0.60 (-1.53%) Vol:494661 shares traded NSE 38.80 -0.50 (-1.27%) Vol:3814900 shares traded Prices|Financials|Company Info|Reports After a disappointing 15-month year ended June that saw it incurring Rs 124 crore of loss, infrastructure firm IVRCL has chalked out a multi-pronged strategy that includes a holiday from bidding for new road BOT projects to stay afloat, said chairman E. Sudhir Reddy.

"The strategy includes staying away from bidding for new BOT road projects for 3-6 months, monetising existing road projects and real estate assets, downsizing the manpower, spreading the construction business to overseas markets, strengthening manufacturing operations and focus on large amount of receivables," said Reddy.

Addressing the media in Hyderabad on Monday, he cited problems in national highway projects such as delays in land acquisition, right of way, cautious approach of lenders and delayed payments as some of the reasons to go in for holiday. He said the period of holiday could be further extended based on the then prevailing market conditions.

"Meanwhile, we will complete the existing road projects in the order book and keep monetizing as and when they are completed and begin toll collections. This will help us get back our equity and transfer the debt burden into the books of the buyers," said Reddy.

The company is targeting to expand its construction business to overseas markets, aiming to report at least 50% of its revenue from overseas operations in 4-5 years, he said. At present, the company does not earn anything from overseas construction business.

The IVRCL Group Chief Financial Officer and Executive Director R. Balarami Reddy said the company has already sold its stake in one of the road projects during last quarter for Rs 231 crore with a profit of Rs 117 crore. The company is looking at selling its equity in three of the completed road projects in Tamil Nadu and is also considering selling three more road projects in other parts of the country. "We expect to get back around Rs 1,000 crore of equity and retire a debt of around Rs 2,400 crore by selling these six road projects," he said.

At present, the company has a debt burden of around Rs 5,200 crore on a consolidated basis and the company incurred finance costs of Rs 731 crore for the 15-month period ended June. In all, IVRCL has invested Rs 1,600 crore of equity in assets that include 10 road projects, a desalination project and an oil tankages project.

On the strategy of pruning down the employee force, Balarami Reddy said the company has already reduced the size by around 15% over the last six months and may go for next round of downsizing if the economy didn't revive in another quarter or so. IVRCL with around 5,000 employees now incurs an expense of around Rs 200 crore a year towards wages.

Further, Balarami Reddy said efforts were also on to realize regular receivables around Rs 1,000 crore of which around Rs 600 crore were blocked from various agencies owing to disputes.

On Monday, the IVRCL stock lost 1.53% to close at Rs 38.70 on BSE, whose benchmark Sensex gained 17 points at 17,766 points.