The share price of the Government-owned National Building Construction Company (NBCC) spurted 3 per cent today and trades at Rs. 805 currently. The main reason for the uptick is the signing of a memorandum of understanding (MoU) with NAWADCO, the Waqf Board, for projects estimated at Rs. 398 crore.
The new agreement lists four locations - Gulistan Shadi Mahal, Masjid-e-Mavalli, Dargah Hazrat Attaullah Shah in Bangalore, and Takiya Chand Shah in Jodhpur - to be developed into institutional and commercial property. In September 2014, the company had entered into a general agreement to develop Waqf Board properties located in multiple locations across the country.
NBCC is also in talks with various government agencies to develop property. Recently the company said it was in discussions for building low-cost homes on land owned by the Railways.
It also plans to tie up with sick public sector units to develop their land. This segment has a higher margin, around 16 per cent, and availability of land will help the company’s expansion plans. Currently NBCC has five projects for 4.4 msf under execution and plans to develop 18 projects for 8.1 msf in the next two-three years.
The company is currently working on redevelopment projects in Delhi. Its Chairman and Managing Director Anoop Kumar Mittal was recently quoted by Reuters as saying that it plans to grow its $3.4-billion order book by 25 per cent a year to 2020.
With Government ownership at 90 per cent, the company’s name often comes up as a potential divestment candidate.