c
c








The Indian construction industry, an integral part of the economy and a

conduit for a substantial part of its development investment, is poised for
growth on account of industrialization, urbanization, economic development
and people's rising expectations for improved quality of living. Construction
constitutes 40% to 50% of India's capital expenditure on projects in various
sectors such as highways, roads, railways, energy, airports, irrigation etc .

The Indian construction industry, an integral part of the economy and a

conduit for a substantial part of its development investment, is poised for
growth on account of industrialization, urbanization, economic development
and people's rising expectations for improved quality of living. Construction
constitutes 40% to 50% of India's capital expenditure on projects in various
sectors such as highways, roads, railways, energy, airports, irrigation etc

Estimates indicate that annual infrastructure investments are projected to rise

from US $ 17.14 bn. in 1995 - 96 to US $ 30.57 bn. to US $ 51.42 bn. in 2005
- 06 at 1995 - 96 prises.

Today, India is one of the six fastest growing economies of the world and
Asia's biggest Infrastructure Investment opportunity.

c        

c 

 !
"#$%$ 
&'(
i The Commonwealth Games - 2010 in New Delhi throws mega
opportunities for Building Material Companies, Construction
Equipments & Technologies companies.

i Commonwealth Games Village project worth US$ 40 mn.

i Elevated Ring Road, Widening and Red esigning of Roads in and

around Delhi.
i More Subways and 15 - 20 Flyovers.

i Sports Specialty Hospital.

i Setting up of a Cultural Centre.

i The Delhi Development Authority (DDA) has been asked to earmark

eight to nine plots for Five Star Hotels.



i The government has announced four lanning of 48 new projects with
an estimated cost of US$ 12 bn. Development and upgradation of
roads will require an investment of US$ 24 bn. till 2008. Private sector
participation in road projects will grow significantly.

i The Golden Quadrilateral Plan" (5850 Kms.) for linking the four
metropolitan cities of Delhi, Mumbai, Chennai and Kolkata with an
estimated cost of US$ 5.5 bn.




i The railway sector will need an investment of US$ 22 bn. for new
coaches, tracks and communications and safety equipment over the
next ten years.

i A 10 year Corporate Safety Plan of the Indian Railways envis aging an

expenditure of US $ 7.24 bn. besides development of appropriate
technology for higher level of safety in train operation.

i Metro Rail Corporation projects worth US $ 12.84 bn in cities like Delhi,

Bangalore, Hyderabad, Chennai, Ahmedabad and many other cities
are on target.

) 
i Up gradation and modernization of airports will require US$ 33 bn.
investment in the next ten years.

)c
c
c*
+*,-
i Projects are coming up to develop Special Economic Zones worth US
$ 2.5 bn.



.
c"& (/''/ 00' 1
i India has a large and growing middle class population of 300 mn
people, out of which a large section is need on new houses. It is
estimated that there is a national housing storage of 41 mn. units.

i Retailing is becoming the boom industry with organized retail being a

market of US$ 6 bn. The sector will need about 25 mn. sq. ft. of space
by the year 2005.

i NASSCOM-McKinsey surveys have predicted the ITES sector in India

will require approximately 100 mn. sq. ft. of office space, which means
a promising opportunity for the construction industry.

i Water supply and sanitation projects alone offer scope for annual
investment of US$ 5.71 bn.

) 
i The Ministry of Power has formulated a blueprint to provide reliable,
affordable and quality power to all users by 2012. This calls for
investment of US$ 73 bn. in the next five years.

!



i The "Sagar Mala" project for expansion and modernization of ports,

inland navigation and maritime transport. This involves an investment
of US $ 22 bn. in a period of ten years. While the government will take
care of 15% of the investment, the rest will come from the private
sector.

.
c
c
c 



›

The Govt. of India has permitted FDI up to 100 % for development of

integrated townships in India last year. India is now the second most
favored destination for FDI, behind China.

Beside these, there are projects coming up to develop Special Bio -

Technology Parks and IT Parks.

.
With the boom in the construction sector building are popping up here and
there. Nowadays people demand for durable and comfortable homes at
competitive prices. This dream of 'home sweet home' is being fulfilled by
petrochemical intermediaries used as basi c materials for manufacturing of
building and constructions materials. These are used for roof insulation
foams, foundation, wall insulation foams, window frames, pipes, fitted
furniture. These materials have become popular due to its low
maintenance, durability, and resistance to weather. Modular kitchens in
modern homes come with working surfaces, tables and shelves that are
resistant to water and washable, as they are made of laminates
manufactured from petrochemicals. These building materials are recycl able
so they are never completely used up.

The current size of the real estate construction industry in India is

estimated to be approximately US$44 billion. The industry is expected to
 witness an annual average growth rate of approximately 26 percent till
2014.

The industry is highly fragmented. The top 10 players account for

approximately 10 percent of the total revenue of the industry, while a major
part is attributed to unorganized real estate contractors. Many new players
are expected to enter the industry with real estate properties, designed
specifically to cater to the current economic conditions and consumer
preferences. Because of improving stock market conditions in India,
approximately 6-7 companies are also expected to come up with their
public offerings in second half of FY 2009 and 2010.

The main focus area of almost all real estate companies is the µaffordable
housing,¶ which controls more than 50 percent of residential sales in key
residential areas such as Chennai, Gurgaon and Mumbai. It is not only the
listed players, but also the unlisted players that have realized that affordable
housing is the way to grow.

Real estate companies are looking at new ways to finance their new projects.
In order to reduce the risk of high debt and inter est expenses, real estate
companies are going for other options such as qualified institutional
payments. Also, the private equity investments are now being done at project
levels rather that company levels.

The Government of India, in order to attract for eign direct investment in the
industry, is working out on easier rules for overseas investors to invest in
smaller real estate projects. The government has also given full exemption to
prefabricated concrete products manufactured at sites in its 2009 annua l
budget.
Source› http› propertybytes.indiaproperty.com index.php newsbytes india -
construction-industry-to-grow-26-annually-to-2014