Investors pouring in big bucks in Hyderabad's realty

Investors are pouring in big bucks into Hyderabad's infrastructure companies. Around USD 550 million of private equity have come in the year 2007 alone reports Viswanath Pilla and Vivin Mathew.

GMR & GVK, which were not exactly household names a mere 5 years ago, are now companies you better know. They’re the ones who won the bids for the modernisation of the New Delhi and Mumbai airports.

Other Hyderabad companies like Indu Projects have taken the cue to grab a piece of the infrastructure pie.

"The ability of raising larger labour pool, ability to stick to project milestones and resources provides a competitive edge for Hyderabad-based companies." I Syam Prasad Reddy, MD & CEO of Indu Projects.

There is an edge that is attracting many private equity firms to Hyderabad. There’s something for everyone and the highest equity infusion was from Blackstone. It put in USD 150 million in Nagarjuna Constructions. Small firms like Soma Enterprise and Aparna Constructions bagged USD 100 million each for malls, townships and roads.

"Everyone wants to be part of booming infrastructure sector, where the real growth is going to take place" adds Maganti Ankineedu, director, soma constructions.

But this is not new to Andhra Pradesh. In the 1960s and 70s, large irrigation and industrial projects like Nagarjuna Sagar and Visakhapatnam Steel Plant created a wave of contractors. Many of whom founded infrastructure companies. a leading example is the Reddy family which owns the Gayatri Projects. Founded by first generation entrepreneur and now incumbent minister T. Subbirami Reddy, it was transformed into an infrastructure company by son Sandeep Reddy.

"Influx of PE funds, corporate governance is helping our companies in the process of transformation. To scale up you need to professionalism, that is where the second generation is making difference." adds TV Sandeep Reddy, MD, Gayatri Constructions.

Also making a difference is the government. It is planning to spend nearly 500 billion on infrastructure projects. That’s certainly more money for Hyderabad that is flush with private equity funds.