Mark AB Capital Buys Shriram EPC for Rs.350 cr

The Dubai-based family office Mark AB Capital procures Shriram EPC, an engineering procurement and construction contractor and part of the financial services conglomerate Shriram group by buying up to 26 percent stake for Rs.350 crore.

The company informed the BSE that its board would meet on May 19 to consider the “strategic investment” by Mark AB Capital.

The notification says, “A meeting of the board of directors of the company is scheduled for May 19 to discuss and consider issuance and allotment of equity shares by way of preferential issue to a prospective investor, and NCDs to the lenders.”

The acquisition is subject to approvals from lenders and other agencies. Shriram group has been finding it tough to manoeuvre the EPC and it has been tottering. For the fiscal ended March 2020, its revenues were Rs.681 crore and incurred a net loss of Rs.81 crore.

T Shivaraman, MD & CEO of Shriram EPC says, “EPC business requires patience and long term investment commitment. Mark AB has investments across the globe in EPC companies and we thought it’s a right fit. They will take over the management and become the new promoters and we will do some hand holding till they get completely rooted in.”

EPC businesses in India are in for better times. In a statement Crisil says, “Strong order books and better operational preparedness in the second year of the Covid-19 pandemic will swell the top-lines of mid-sized engineering, procurement and construction (EPC) companies by 15 percent this fiscal, compared with a nearly 10 percent fall last fiscal.”

EPC companies into construction of roads, commercial and industrial buildings, irrigation, and allied activities indicate as much. The aggregate top-line of these players were Rs.70,000 crore last fiscal.