Section A - Group 12

Presented By
15927800
Patidhar
159278004
15927800
159278104
159278119
singh

:
Aditya
Akash Mittal
Rajsekhar
Viswa Teja
Sudhir

Disclaimer
An example of microproject presentation for Strategic Management of Technology course under guidance of
Professor K. S. Momaya.
Microprojects are undertaken in the unique course at IIT Bombays SJM School of Management (SJMSOM)
for learning and class room discussion purpose and not to criticize the process of managerial decision
making or actual decisions at the company. They must not be used as source of secondary data without
written permission of the
guide at momaya@iitb.ac.in
Miniproject copyright by IIT Bombay, 2016

Objectives and Motivation

Key Objectives
Analyse this issue and generate insights into the problems being faced and methods adopted to overcome
the debt in Infrastructure industry by GMR
Reasons that led to the poor performance of GMR, despite winning international awards for its Delhi and
Hyderabad airports

Motivation Behind Selecting GMR

The construction industry is the second largest industry of the country after agriculture
GMR Group has a wide presence, impact and scope that extends from national to the global, supporting
livelihoods to enhancing the quality of life & plugging infrastructure gaps to create benchmark assets
GMR is investing in a multi-layered approach to technology, with Chairman insisting on Technology upgrade
Mr GM Rao received the prestigious ABLF Lifetime Achievement Award organized under the theme
Technology and Disruptive Innovation in 21st Century Asia.

Source: http://www.moneycontrol.com/news/business/gmr-infra-plans-to-raiseto-rs-2500-cr_7328441.html?utm_source=ref_article,
http://www.gmrgroup.in/pressreleasedetail-01-December-2015.aspx

Root Cause Analysis

Company
Financials

Global
Impact

Domestic
Hindrance
s

GMR company reported a consolidated net loss of Rs 953.5 crore(2015-16) as

against a net loss of Rs 891.9 crore in the year-ago period
GMR Infra plans to raise up to Rs 2,500 cr to upgrade on their technological front
and grow

Potential impact of volatility in oil prices and geopolitical issues such as ongoing
conflict in Middle East
Entry of Large Foreign players with huge assets, technology and power to play
price war

Economic regulation from Ministry of Civil Aviation against the Tariff order
GMR struggling with softer-than-expected demand and heavy debt brought on by
years of aggressive expansion
Decreasing Trust of Investors pressuring GMR to repay the loan or face legal
consequences

Opportunities
Govt of India UDAY
scheme for energy sector
Aviation market of India
to become the third
largest by 2020
Actively participating in
the bid for development
of the Greenfield Airport
at Mopa, Goa as well as
Navi Mumbai Airport
Govt of India has plans to
award Highway projects
worth Rs 100,000 Crore
in FY17

Source: http://economictimes.indiatimes.com/articleshow/52791986.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
http://investor.gmrgroup.in/pdf/Annual%20Report%202015-16/Board's%20Report/4.%20Management%20Discussion%20Analysis.pdf

Evolution And Key Milestones

MOTically GMR
Brick to
Click

Now one of the first thing now build at a new project site is
broadband tower so that senior managers sitting in Bangalore
have access to the latest status report
- Subbarao Hegde, CTO, GMR
With more than 36 infrastructure
projects (worth hundreds of
crores)
Effective project management is
required

E RP

Knowledge
Manageme
nt Portal

making sure critical business data is

accessible across people, processes
and partners
Initiati
ve

W
A
W
A

Work Anywhere, Work Anytime

Way Forward
Group Strategy

Consolidate existing Energy & Highways projects

Capex holiday in Energy & Highway projects
Explore select profitable opportunities in the Airport sector
Focus on consolidation and strengthening of balance sheet through deleveraging
Continuous reduction of Corporate Debt
Refinancing of project debt through capital market / bank refinancing route to result into
Reduction of interest rate,
Projects getting longer moratorium and
Extending maturity of debt primarily to align the repayment schedule with the Cash Flows
of the project
Financial Initiatives to Strengthen the Balance Sheet

Capital raising through IPO GMR Airports Ltd

Induction of strategic / financial partner in Airport holding company
Divestment of certain operational Energy / Highway projects
Recovery of receivables from Maldives arbitration, Energy Distribution companies, etc

Key SMOT Issues

How GMR Infra can use technology as a tool to the leader in
Indian construction industry ?
What are the reasons that led to the dip in the performance
of GMR Infra?
Identify challenges involved in developing a world-class
infrastructure project in developing countries?
How its competitors are handling these challenging
environments both nationally and globally?
What measures are to be taken to overcome these challenges
and increase the market presence of the company?

26-08-2016

GMR - Group 12_Sec A

Technologies at GMR
GMR group looking at the need to introduce and implement latest technologies has
acquired majority stake in Geokno so as to mature the LiDAR technology fully in
India

Terrestrial LiDAR technology

contains algorithms

and workflows for collecting rapid and accurate 3D

point cloud data

It measures information even in inaccessible areas

It offers both long range and short range terrestrial

laser scanning services from data acquisition to
final deliverables

Provides 3D image data to the user

Source -http://www.geokno.com/index.php/technology/terristria
26-08-2016

GMR - Group 12_Sec A

Terrestrial LiDAR Technology

26-08-2016

GMR - Group 12_Sec A

10

Technologies at GMR Contd..

Baggage Handling System:
Advanced 5 level inline baggage handling system with explosive detection technology for greater
efficiency and security

26-08-2016

GMR - Group 12_Sec A

Source
-http://gmrgroup.in/dial.asp

11

Critical Success Factors

Process Innovation:

Strategic
Strategic partnership
partnership with
with Wipro.,
Wipro., First
First of
of its
its

Over 168 counter in the check-in area to

kind
kind JV
JV

speed up check-in and security clearances

immigration procedures
Two

tier

terminal

building

departure

complex on the upper level and the arrivals

DIAL
DIAL entered
entered into
into Operations,
Operations, Management
Management

Technolog
ical
Innovatio
n

at the lower level

Access to the aircraft from the terminal is

focused
focused on
on emerging
emerging business
business

models
models and
and technologies
technologies for
for airports
airports

unobtrusively
More than 95 desks for fast and smooth

Organizational Innovation:

and
and Development
Development Agreement
Agreement (OMDA)
(OMDA) with
with
the
the AAI
AAI
Strategy
Strategy of
of Asset
Asset Light
Light and
and Asset
Asset Right
Right
model
model to
to shore
shore up
up its
its revenues
revenues and
and improve
improve
business
business

provided by 4 piers

Product Innovation:

RGIA- first Indian airport to have the Airport

Advanced 5 level in-line baggage handling system with explosives

Operations Control Centre, the nerve centre

detection technology for greater efficiency and security

for all coordination within the airport

Airport also incorporates modern IT systems like Flight Information

Display Screens, Baggage Handling System (BHS) and uses Airport
Operational Database (AODB) technology for the first time in India

Source
-http://www.gmrgroup.in/
26-08-2016

Longest runaway in Asia with capacity to handle an A380-size

aircraft
GMR - Group 12_Sec A

12

Global Presence Benchmarking

ROG-Revenue
earnings in forex (%)
ROG-Revenue
expenses in forex (%)

Group has infrastructure operating assets and

projects in several countries including Turkey,
South Africa, Indonesia, Singapore, the Maldives
and the Philippines
40% share
in MICA
-Philippines
26-08-2016

30% stake in
Golden
Energy Coal
MinesIndonesia

70% equity
share in
Hydro
projectNepal

GMR Infrastructure in partnership with Megawide

Construction Corporation of Philippines emerged as the
highest bidder for Mactan Cebu International Airport
(MCIA)
It is the second busiest airport in the Philippines
GMR-Megawide consortium is now in the race with five
others to acquire management operations for five other
airports in the Philippines
Country
Competitor
Philippines

JG Summit

Turkey

Fraport, TAV

Maldives

GVK, TAV

Malaysia

Mak-Yol Construction

Sources- www.gmrgroup.in,
GMR - Group 12_Sec Atimesofindia.cindiatimes.om

13

Financial Comparison
Revenues in last five years ( in Cr. Rs.)

Profit in last five years

GMR
Lanco infratech

GMR
HCC

Reliance infra
L&T

Reliance infra
HCC

Lanco infratech

2013 was a booming year for industry

Most companies have declining profits but GMR is
growing steadily
Demand for construction has been sluggish in
2014, with industry growth estimated at 1.6%
over the previous year
Due to greater focus on large NPAs, getting
funding has become all the more difficult

GMR has been profitable always unlike

Lanco Infotech and HCC

Till 2013 profitability of industry

increased due to growth in construction
but after that decline in demand and loan
payments decreased profits

Sorces:http://www.ey.com/Publication/vwLUAssets/EY-making-india-brick-by-brick/$FILE/EY-making-india-brick-by-brick.pdf,
www.moneycontrol.com, www.capitalline.com,

Financial Comparison

Sorces:http://www.ey.com/Publication/vwLUAssets/EY-making-india-brick-by-brick/$FILE/EY-making-india-brick-by-brick.pdf,
www.moneycontrol.com, www.capitalline.com,

Financial Comparison

Sorces:http://www.ey.com/Publication/vwLUAssets/EY-making-india-brick-by-brick/$FILE/EY-making-india-brick-by-brick.pdf,
www.moneycontrol.com, www.capitalline.com,

Financial Comparison

CAGR Gross Revenue

16%

CAGR EBITA

22%

CAGR Total Assets

10%

Sorces:http://www.ey.com/Publication/vwLUAssets/EY-making-india-brick-by-brick/$FILE/EY-making-india-brick-by-brick.pdf,
www.moneycontrol.com, www.capitalline.com,

Technology Benchmarking
Siemens

GMR Infra
GMRs core competency is
deploying technology and
managing project
Focus is on cost and energy
efficiency, Delhi international
airport operated by GMR is
worlds first airport to get
ISO 50001:2011
GMR is now focusing on
acquiring new technology like
LiDAR and also planning to
purchase automatic track
relaying machine
It expanded into energy
sector in both traditional
sources as well as renewable
sources such as solar and
wind energy and operating
power plants of 2500 MW
capacity
26-08-2016

Siemens uses latest EAD

technology
which
incorporates automation and
digitalisation
from
power
generation
to
power
transmission
Siemens is world market
leader in offshore wind power
turbines
The
Airbus
Group
and
Siemens have reached a
long-term
collaboration
agreement in the area of
hybrid-electric
propulsion
systems
Siemens is one of the world's
largest
suppliers
of
technology for the healthcare
industry and a leader in
medical imaging, laboratory
diagnostics and advanced
image-guided
therapy
applications
GMR - Group 12_Sec A

Reliance
Infrastructure
Reliance Infrastructures core
competency
is
deploying
technology and managing
project
however
it
has
strength in other areas
In is constructing a worlds
largest
gas-fired
thermal
power plant in UP
R-infra
has
competence
in
generation
and
construction

strong
power
highway

R-infra is planning to venture

into
defence
warfare
manufacturing through Joint
Ventures with technology
partners, currently focusing
on submarine, project worth
6000 crore.
18

Entering into railways projects with partners

GMR is early mover in Airport constructions and
operation in India
In power generation sector it is working on
Expanding into power generation and transportation
6000MW of projects in India and Nepal
and aviation
GMR has entered into wind power generation
Airport construction and operation outside India
with projects of 4MW capacity in India
(Philippines )
GMR infra is making alliances with foreign
There is scope for more growth as GOI has planned to
companies for domain expertise and technical
Arena
invest $1 Trillion in infrastructure mostly on power
collaboration
generation and now many contracts are awarded
more through EPC
It has collaboration with market leaders in
every sectors to take expert suggestions from
Staging Economic
Vehicles
them
Logic
Its core competency is to build expertise
Joint venture with malasian airports
quickly in its venturing sectors and completion
GMR Group has acquired majority stake in
of project
Geokno so as to mature the LiDAR technology
Differentiator
Portfolio of scalable projects
fully in India
Focusing on efficiency, DIAL is first airport to
GMR should focus more on acquiring more
obtain ISO 50001:2011 certification for energy
technology provider company and dedicate
management
R&D to develop internally
GMR should focus on patenting process Concentrating more in renewable
energy by allocating more
improvement so as to compete with companies
money on its R&D
like R-infra, L&T and to enter into other
Getting more projects through
countries
EPC
Doing more of mergers Acquiring
companies to build competence
in sectors it is venturing into
26-08-2016

GMR - Group 12_Sec A

19

Technology Benchmarking
Technology Significance

Emerging

Alternative
energy

Level of Technological Competence

Clear
Favourabl
Strong
Tenable
Weak
Leader
e
Siemens - L&T- Indias GMR- Solar
World leader largest solar and wind
in wind
power
power
turbines
project
projects

L&T, ABB
GMR
R-infra

India
Siemens

L&T
R-infra, GMR
L&T,RTCE
Mahimtura

infra,GMR
L&T

R-infra, GMR

Key

High-tech
equipments
IT/ERP

Key

Consultancy

Key

Technology

Pacing

R&D

Siemens

ABB India

L&T, R-infra

Emerging

Military

R-infra

L&T

Base

26-08-2016

GMR - Group 12_Sec A

R-infra

GMR- No
patients &
no R&D
spend
GMR
20