Construction Technologies – The Way Forward

Rohit Katyal, Executive Director and Chief Financial Officer, Capacit?e Infraprojects Limited (CIL) speaks about the new technologies and systems that are now changing the way building construction is done. With the growing scale and complexities of projects, advanced construction systems are now being adopted in Indian real-estate. From pre-cast technology to monolithic concrete casting of slabs and beams, the building construction methods are fast improving.  For instance, the use of tunnel-form produces high quality monolithic structures and Mivan Shuttering offers strength and durability to a building by using aluminium formwork system. Similarly, for construction of multi-story vertical concrete elements in high-rise structures, such as shear walls, core walls, lift shafts and stair shafts, the jump form or ACS (Automatic Climbing Systems) is the most efficient formwork. It comprises the hydraulics enabled formwork and working platforms. The formwork supports itself on the concrete cast earlier and does not rely on support or access from other parts of the building or permanent works. Now day’s composite construction is popular for commercial buildings that involves composite steel-reinforced concrete floor slabs cast in situ or prefabricated. All the new construction techniques are used depending on the design and the time cycle the client permits. Other considerations include, project design requirements, construction methods and project drawings and documents. It is a whole combination of factors that leads to the selection of construction technology to be used. Real-estate Scenario Indian real-estate is an amalgamation of organised and unorganised players. Only 18-20 per cent of the sector comprises organised developers and companies. The rest of the market consists of small time professionals like land owners, single project owners or those operating in Tier-II and Tier-III cities. The last year witnesses major sectoral reforms especially RERA. The accountability has increased manifold post RERA implementation. This would require developers to adopt time and quality efficient technologies for construction and timely deliveries. Though the past year was slow due to the new changes, the coming year would be much more productive with the changes settling down and growth of confidence among both buyers and investors From execution perspective, GST does not impact the construction business in a big way but the initial three months were affected at a deterrent level because order amendments were in process. The orders have picked up since December because all the order amendments are in place. By January or mid-February, there is a hope that things will settle down. GST offers certain input credits to a contractor or a consumer. Steel had an excise duty which was not available as an input credit. Now, it will be available as an input credit. These moves have brought down the cost of construction. Services never had the excise duty and the input component was 42 per cent. From client’s perspective, anything which is below Rs 7,000 per sq.ft will see a reduction. In my opinion, there will be definitely a benefit where the land cost is bare minimum and construction is higher than the land cost. Growth and Investment The company was incorporated in the year 2012 and over the last five years has expanded to three main geographies that encompass the National Capital Region, Mumbai Metropolitan Region and Pune in West and cities of Bengaluru, Chennai, Kochin, Hyderabad, and Vijayawada in South apart from some other major cities spread across India. We are working with all the major developers across the country on construction of residential, commercial and institutional buildings. Over the next three years, we  look at the revenue coming from the robust order book which we already have. The company had recently launched an IPO, the funds raised through the issue will be utilised for working capital requirements, purchase of capital assets and for general corporate purposes. The company is planning to expand into new geographies and given that RERA is realty now, the developers need expert construction companies for project execution. The incremental revenues would require more working capital which the company already has. Thus, the increase in top line will bring in a proportionate growth.