NBCC working on Namami Gange Programme

The Ministry of Water Resources, River Development & Ganga Rejuvenation, Government of India engaged National Buildings Construction Corporation (NBCC) to carry out work under the Namami Gange Programme. The engagement in this program may help to the company to build its order book. The stronger order book will directly reflect the financials of the company. Ultimately, the investors will get benefits from the order inflows.

The government also roped in leading Central Public Sector Undertakings (CPSUs) for the Namami Gange plan. Other than NBCC the list of CPSUs include Engineers India (EIL), Water and Power Consultancy Services (WAPCOS), National Projects Construction Corporation (NPCC), and Engineering Projects India.

The work allotted to the NBCC as Condition Assessment & Feasibility Study and Entry Level Activities under National Mission for Clean Ganga (NMCG) is for all towns and cities of Bihar on the bank of river Ganga. The entry level activities will include modernization and provision of public amenities at ghats, repairs, cleaning of the river surface, treatment of directly discharging drains in villages along Ganga and repairs. This will also include renovation and construction of crematoria.

These activities will deploy improvised wood based cremation platforms, advanced trash skimming machines for removal of floating solid wastes, bio-toilets and bio remediation based sewage treatment in rural areas.

During the month of May 2015, the government approved the 'Namami Gange Programme' to clean and protect the river Ganga in a collective manner. The cabinet has allocated funds of Rs 20000 crore for the next 5 years for the same.

NBCC has a total order book of Rs 30000 crore as of H1FY16 and is expecting about Rs 6000 to 10000 crore additional order inflow in H2FY16. The company is expecting 25 per cent CAGR in the upcoming years.

NBCC's shareholding pattern indicates that FII holdings expanded by 27 basis points to 2.5 per cent while DII holdings contracted by 6 basis points to 1 per cent in the September 2015 quarter. The government currently holds 90 per cent stake in the company. There is no progress for compulsion to cut the government stake up to 75 per cent. NBCC's share price increased by 2.88 per cent on bourses in early trades and is trading at Rs 978.8 on intraday basis.

NBCC is in the business of civil engineering construction services. The company has three segments viz. Project Management Consultancy (PMC), Engineering Procurement & Construction (EPC) and Real Estate Development. The company's PMC segment contributes to almost 85 per cent of its annual revenue.