GMR Company Analysis: Submitted By: Group 9
GMR Company Analysis: Submitted By: Group 9
GMR Company Analysis: Submitted By: Group 9
ANALYSIS
Aman Anand
Apurv Sunil
Rajeev Purvey
Contents
2.3Major Events which has shaped the firm over the period of Time
2.7 Marketing
Mission – “To build entrepreneurial organizations that make a difference to society through
creation of value.”
Vision – “ GMR Group will play a pioneering role in developing innovative projects in
providing world-class services in infrastructure. We will grow to become a dominant player
in the field of infrastructure while sustaining our presence in agro business.”
Corporate Governance at GMR is driven by a simple principle - 'Achieve right results by right
means'. The Group even transcends legal guidelines and attempts to venture into the hearts
and minds of all its stakeholders in its steadfast approach. Corporate Governance is a
journey rather than a destination. GMR continually works at improving its practices and
processes as it spreads its presence through continents to touch more and more lives.
'Balancing the interests of all its stakeholders,' is the prevailing motto during this journey.
The seven core values, which is now deep rooted in the organisation, vibrate and resonate
with the spirit of principles of corporate governance. Entrepreneurial culture of the
organisaton builds value adding business and enhances shareholders’ value. Teamwork and
Relationships bring in the synergy of human intelligence, contributing to organisation’s well
being, openness and transparency. Deliver the Promise puts in place the system of
responsibility and accountability at every level.
Learning makes the organization more agile and competitive, and also enhances the
employees’ knowledge, competencies and net worth. This builds the employees’ career with
increased rewards and enables him/her to deliver more value.
Social Responsibility ensures the organisation meets all legal and tax compliances and
safeguards the interests of the society and environment. More importantly, it leads us to
recognise the wants of the needy and mobilise the organisation’s resources for their
redressal and upliftment. Respect for Individual treats every shareholder, employee, vendor,
customer, citizen and each stakeholder with sensitivity and respect. Humility, above all,
constantly keeps achievement-triggered-arrogance under check and empowers every
employee to discharge his fiduciary duty with complete responsibility.
For its efforts in institutionalising rigorous processes in line with its values and beliefs, the
Institute of Company Secretaries of India (ICSI) has selected GMR Group as one of the top 25
companies adopting good corporate governance practices and nominated GMR for its ICSI
National Award for Excellence in Corporate Governance. The award instituted in the year
2001, seeks to identify, foster and reward the culture of evolving globally acceptable
standards of corporate governance among Indian companies. It is conferred annually on
companies following the best corporate governance practices.
2.3 Major events which has shaped the firm over the period of time
GMR Infrastructure (GIL), incorporated in May 1996, was earlier known as Varalakshmi
Vasavi Power Projects and is located in Andhra Pradesh. The name was changed to GMR
Vasavi Infrastructure Finance in 1999, and later to GMR Infrastructure in the year 2000.The
company is the infrastructure holding company formed to fund the capital requirements of
various infrastructure projects in Energy, Highways and Airport and SEZ sectors. It
undertakes the development of the infrastructure projects through its various subsidiaries.
Energy: It is also involved into development of power plants. It has successful developed 200
MW power plant for Tamil Nadu State Electricity Board. It has lined up of power projects
such as Vemagiri Power Generation (388.5 MW),GMR Bajoli Power Project(180 MW) and
GMR Chhattisgarh Power Project(1000 MW), among others. The company also has a
portfolio of assets, which include gas, coal, and hydro projects; and two hydro projects in
Nepal, one gas based power project in Singapore, and coal assets in South Africa and
Indonesia.
Highways GIL is also into developing of highways and has completed two road projects
awarded by the National Highway Authority of India (NHAI) namely Tambaram–Tindivanam
and Tuni–Anakapalli. It has won other highway projects namely Ambala–Chandigarh,
Adloor–Gundla Pochanpalli, Tindivanam–Ulunderpet and Thondapalli–Jadcherla. In addition,
the company holds concessions for six highways measuring a total length of approximately
1684 Lane kilometers, as well as provides illumination, with high–mast lighting at various
junctions and flyovers.
GIL it engages in the production of sugar; and development of a multi product special
economic zone in Krishnagiri district in Tamil Nadu. It has developed sugar plants for Sankli
Sugar, Dhanalakshmi Sugar and Haliyal Sugar. GIL has taken up development of SEZ located
in Krishnagiri District in Tamil Nadu. It offers aircraft charter services and consultancy for
business aviation.
Business Highlights
Surpassed 40mn and 10mn passengers in Delhi and Hyderabad Airport respectively
Taken over operations of Mactan Cebu International Airport, Philippines Achieved Fuel
Security for entire 3,000 MW of coal based power plants – Won 2 coal mines for
Chhattisgarh plant (1,370 MW) Successfully tied up gas supply for Vemagiri plant (370 MW)
and Rajahmundry plant (1 unit of 384 MW) for 25% PLF GMR has received favorable orders
for ongoing claims in Energy projects of approx. Rs. 175 crore (includes recurring positive
impact of Rs. 60 crore per year) Won Dedicated Freight Corridor Corporation (DFCC) project
of Rs. 5,081 crore in Eastern Corridor in the EPC segment Raised ~ Rs. 2,879 crore through a
QIP and Rights Issue, which is used primarily towards corporate debt servicing Successful
stabilization of operations of the thermal power plants has enabled significant turnaround
of Energy sector with EBITDA of the sector growing by almost 8 times to Rs. 222 crore for
FY15 from Rs. 28 crore for the last year. This quantum jump enabled GMR Infrastructure on
consolidated basis an EBITDA of Rs. 2,555 crore, which is at the same level of last year.
Current year EBITDA has been maintained even after the following impacts on EBITDA Rs.
130 crore of non-recurring expenditure in Highways sector towards major maintenance,
Divestment of Turkey Airport and Ulundurpet Expressways during FY14, which were
contributing Rs. 200 crore of EBITDA, Rs. 336 crore impact in EBITDA due to discontinuation
of UDF in Hyderabad Airport.Improved operating performance in Energy sector resulted in
consolidated Gross Revenue of Rs. 11,088 crore for FY15 showing an increase of 4% from Rs.
10,653 crore for the previous year.Enhanced fuel security with respect to Energy plants and
removal of structural bottlenecks are expected to facilitate the sector in improving its
performance considerably in the coming quarters.On the financing side, GMR Infrastructure
has raised Rs 1,402 crore through Rights Issue, which has been used primarily towards
corporate debt servicing. Further, DIAL concluded a landmark transaction of issuance and
successfully pricing of an inaugural USD 288.75 million 7-year Senior Secured bond offering.
Financial Highlights for Q4 FY15
Highlights:
DIAL surpassed 40 mn pax for FY15. Traffic for the year has grown by 11% to 41 mn.
DIAL became no. 1 airport in terms of Cargo movements in India. Cargo tonnage has
increased by 15% to 0.696 MT for FY15.
DIAL achieved the global ASQ Rank 1 in the 25-40 million passenger category.
GHIAL traffic crossed 10 mn mark and handled 100,000 MT of Cargo for the first time. GHIAL
registered a whopping traffic growth of 20% in FY15 and Cargo increased by 14%.
GHIAL maintained its top 3 rank In the 5-15mn category by ASQ for 6th Consecutive year.
Discontinuation of UDF in GHIAL has impacted the performance of Airports Segment.
Energy Segment:
Highlights
Revenue of Energy segment has grown by 33% in FY15 and EBITDA has increased from Rs.
28 crore to Rs. 222 crore on account of improved performance of EMCO and Kamalanga
plants, which were fully operational during the last year.
Chhattisgarh - Completion of full load trial run of Unit I (685 MW) and clearance from grid
for declaring the unit commercial.
EMCO - Secured a 70 MW open access to Telengana for supply of power
Kamalanga - Secured a short term PPA to Punjab for monsoon month
Received favorable orders for pending cases:
Interim order from SC directing BESCOM to pay GMR the principal amount of Rs. 67 crore
towards charges in the Section 11 case.
Interim order from SC on reimbursement of MAT charges of Rs. 24 crore by AP Transco to
Vemagiri plant.
APTEL favorable order on POC charges to MSEDCL of Rs. 72 crore (recurring impact on
revenue of Rs. 60 crore)
Rajasthan regulatory Commission order directing Rajasthan Discoms to pay full invoice value
going ahead and past receivables of Rs. 14 crore to Maru Transmission Company.
Highways Segment
Highlights
Partial COD Chennai Outer Ring Road (annuity) and final COD of Hungund Hospet Toll Road
projects achieved during FY15.
Revenue of the three toll projects increased by 19% for FY15 as compared to previous year.
Major Maintenance of Rs. 130 crore, which is non-recurring in nature, has impacted the
performance of Highways segment.
General Electric
Suppliers of engines for Mangalore &
Rajahmundry plants. We have entered www.ge.com
into a Long Term Service Agreement
with GE for both plants.
DOOSAN
Signed BTG EPC Contract with GMR www.doosan.com
Chhattisgarh Energy Limited
Shanghai Electric Company
Signed BTG EPC Contract with EMCO www.shanghai-electric.com
Energy Limited.
Gammon India
Contract signed for Bajoli Holi Hydro www.gammonindia.com
project in Himachal Pradesh.
Shandong Electric Power Company
(SEPCO)
Engineering, Procurement and www.sepcc.net
Construction (EPC) contractor for
Kamalanga Power project in Orissa
Transportation
The GMR Group has forged successful relationships with the following concerns for domain
expertise and technical collaboration.
Chinmaya Vidyalaya
Chinmaya Vidyalaya is among the most
respected education providers in the http://gmrchinmayavidyalay
country. GMR Chinmaya Vidyalaya, ahyd.org/about.php
Shamshabad is a collaboration between GMR
and Chinmaya Vidyalaya.
Dayanand Anglo Vedic Society (DAV)
The DAV College Trust and Management
Society is the largest non-governmental
educational organization in India managing a
www.davcmc.net
chain of 667 institutions. It has collaborated
with GMRVF to run the Seetha Mahalakshmi
DAV Public School at Palakonda, Andhra
Pradesh and GMR Varalakshmi DAV in Rajam.
Schulich School of Business, York University,
Toronto
GMRVF has entered into an MoU with
Schulich School of Business, a leading
www.schulich.yorku.ca
business school in Toronto, to offer an MBA
program on twinning mode under GMR
School of Business leading to a Schulich MBA
degree
TOMS
TOMS is a US based shoe company which
works with a unique vision: With every pair
of TOMS Shoes purchased, TOMS will give a
www.toms.com
pair of new shoes to a child in need. One for
One©. GMRVF partnered with TOMS to give
new shoes to under-privileged children in its
project areas.
Evangelical Mission Hospital, Tilda
GMRVF at Chhattisgarh has tied up with
Evangelical Mission Hospital, Tilda to run
community dispensaries, ambulance, blood
bank and to provide health awareness and
health care and support services
Quality CARE India Ltd. (CARE)
GMRVF has entered into an MoU with CARE
Hospitals for operational management of
www.carehospitals.com
two hospitals-a 135-bed multi-specialty
hospital at Rajam and a clinic at Kakinada SEZ
project area
Helpage India
Is helping the Foundation in running several www.helpageindia.org
Mobile Medical units.
Andhra Bank
Financiers of the Rural Entrepreneurship
www.andhrabank-india.com
Development Institutes set up by GMR
Varalakshmi Foundation in Rajam.
Ashok Leyland
Partnership with GMRVF offers vocational www.ashokleyland.com
training in heavy vehicle repairs at Rajam
ATDC
ATDC is a non-profit Society, under the aegis
of the AEPC(Apparel Export Promotion
www.atdcindia.co.in
Council) , Ministry of Textiles, Govt. of India,
partnered with GMRVF to offer training in
apparel designing at New Delhi
CELEBI
The oldest ground handling services
company in aviation industry, partnered with www.celebi.com.tr/en/
GMRVF to train Cargo professionals at New
Delhi
Health Spa- (The Four Fountains Spa)
CMYK Health Boutique Private Limited, a
company, which runs a chain of health spas,
has a business need to create well-trained www.thefourfountainspa.in
spa therapists has partnership with GMRVF
to offer skill training in Spa therapy at New
Delhi.
Hero MotoCorp Dealers Association of
Hyderabad
This is a local partnership at Hyderabad city
level where all the Dealers Association of
Hero MotoCorp has partnered with GMRVF
to conduct a course on two-wheeler repair
and servicing.
Schneider Electric India Foundation (SEIF)
Schneider Electric is a global specialist in
energy distributions and is committed to
train young people from bottom of the
http://seifoundation.schneid
pyramid in electrical skills through its
er-electric.com/in/
Foundation. SEIF has partnered with GMRVF
to produce efficient electricians through
GMRVF’s vocational training centers at
Hyderabad, Bangalore, Rajam and Delhi
VDMA
German Engineering Federation (VDMA) in
association with Deutsche Gesellschaft fuer
Internationale Zusammenarbeit (GIZ) GmbH
has developed partnership with GMRVF for www.vdmaindia.org
innovative “Skill Development Program in
Cleaning Sector skills for Facility
Management (FM) sector in India” offered at
GMRVF’s vocational training center at Delhi
Voltas www.voltasac.com
Partnered with GMRVF in offering vocational
training course on refrigeration and air
conditioning at Hyderabad, Bangalore, Rajam
and Delhi
Volvo Construction Equipment
Volvo Construction Equipment is one of the
www.volvoce.com/construc
world's largest manufacturers of
tionequipment/asia/en-
construction machines. GMRVF partnered
in/Pages/home.aspx
with Volvo CE to offer vocational training in
Excavator Operators at Hyderabad
SELCO Foundation
SELCO Foundation, not-for-profit arm of the
Solar Electric Light Company, has partnered
http://selcofoundation.org/
with GMRVF to provide access to solar
lighting for migrant labour communities in
Bangalore.
Rolling Stock
Leasing
Infrastructure Rolling Stock
Rolling Stock Company Operating
Constructor Maintenance
Manufacturer Rolling Stock Company
and Manager provider
Financing
company
2.7. Marketing
Marketing Strategy GMR Group, one of the fastest growing infrastructure enterprises in the
country, has adopted strategy of 'Asset Light and Asset Right' model to build upon its
advantage of the expertise it has developed over the years to shore up its revenues and
improve business. So, its spending on marketing is less.
2.8. Key Success Factors
In the airport division, GMR reported a good performance. While DIAL’s passenger traffic
reported 22.8% YoY growth to 13.13 million, HIAL’s passenger traffic grew 18.1% YoY to
3.26 million in Q4FY16.
GMR has a strong a diverse portfolio of assets cross different infrastructure sectors.
Two key airports in India at Delhi & Hyderabad so Serves nearly 30% of India’s passenger
& 29% of Cargo traffic
GMR has pioneered the concept of aerotropolis in India which helps the company to
exploit its space around airport efficiently for greater revenue.
BOT concession for 30+30 years from GOI
Coordination with govt. agencies for clearances
Streamline operations to meet global practices and standards
Group Chairman - ‘First Generation Entrepreneur Of The Year’ at the CNBC TV18 India
Business Leader Awards 2009
The Award was presented by the Union Minister of Human Resources Department (HRD)
Mr. Kapil Sibal on 3 December, 2009 at New Delhi.
TERI Corporate Award
1
http://www.gmrgroup.in/pdf/Chairman-Message.pdf
'Essar Steel Infrastructure Excellence Award 2009'
The Routes Airport Marketing Award
Infrastructure Excellence award from CNBC TV 18
SATTE Award to Kiran Kumar Grandhi
Kiran Kumar Grandhi, Chairman - GMR Airports and MD - DIAL received SATTE's - ' Young
Entrepreneur Award 2009' in the area of Travel and Tourism.
Infrastructure Acquisition of the Year Award
2008 IAHV Ethics in Business Award
Group Chairman
'Entrepreneur of the year' award at the Economic Times Awards for Corporate Excellence
2006–07 in recognition of his exemplary entrepreneurial spirit.
'Most Promising Entrant to the Big League' by CNBC TV18 at its `Indian Business Leader
Awards 2007’.
'Most Inspiring Entrepreneur of the Year – 2008' award by National Institute of Industrial
Engineering (NITIE), Mumbai.
ORBIS Award
CIO Award
SAP ACE 2008 Best GRC Implementation Award
2016
Delhi Airport becomes first airport in Asia-Pacific to achieve carbon neutral status
CIDC Viswakarma Award 2016
Bulandh Bharath Award
2015
Delhi Airport creates history by clinching no 1 position in the ACI 2014 rankings - A 13
member team from IGIA receives the award in Jordan COST STRUCTURE
RGIA, Hyderabad airport ranked 3rd in 5-15 Million Passengers Per Annum category
KRISHNAGIRI Special Investment Region: GMR Group is developing GMR Krishnagiri Special
Investment Region (GKSIR) near Hosur, Krishnagiri district, Tamilnadu. GKSIR is a Greenfield,
state of the art, large scale integrated, multi product industrial project, developed through a
Joint Venture with Tamil Nadu Industrial Development Corporation (TIDCO).
KAKINADA Special Economic Zone: Spread over an extent of approximately 10,500 acres, the
Special Investment Region has been conceived as a Captive Port based Multi Product Special
Economic Zone. The Project would cater to the existing industries at Kakinada, mainly
Process Industries and expand into emerging sectors such as Refinery, Renewable Energy,
Ship Building, Biotech, Nanotech, IT/ITEs, Toys, Games and Sports Goods manufacturing
Park etc. in DTA (Domestic Tariff Area) & SEZ.