The company was originally incorporated as Gremach Commerce Private Limited on June 12, 1991 with Registrar of Companies, West Bengal and subsequently converted into a Public Limited Company on December 16, 1995. The Company was renamed as Gremach Infrastructure Equipments & Projects Limited with effect from August 9, 2005.

Rishi Raj Agarwal, Managing Director, Gremach Infrastructure Equipments & Projects, is a commerce graduate and has over 10 years of experience in the marketing of renting heavy equipment. He has been instrumental in putting in place reporting structures and feedback mechanism to improve the service quality to clients. He, along with his team, have focused on servicing a diversified client base as a derisking strategy.

Anil Mascarenhas of India Infoline spoke with Rishi Raj who says, ?From the clients? point of view, we are their one-stop shop for construction-related equipment.?

Renting construction equipment is your business. But you have most of the equipments being sub-rented. How viable is this business model?

Our main activity is to provide on rent construction and earthmoving machineries. We cater to the needs of medium and large construction companies. Their projects span across a wide range of verticals including roads, airports, power projects, institutional & industrial complexes, multiplexes and residential buildings. In order to cater to the requirement of these contractors we have to take various equipments from others, as we may not have all the equipments required by them.

A look at your revenues shows that only around 20% comes from equipment owned by you. What prevents others from entering this business?

To begin with we have around a decade old experience in the rental business. We have been dynamic enough to diversifying our selection of equipment to suit different business segments. In doing this we have hired equipment owned by other parties, which we then rent to our own clients. From the clients? point of view, we are their ne-stop shop for any such equipment.

Yes, our turnover from rehiring of equipments is around 83% of our turnover while around 17% of the revenues come from our own equipment. This scenario will change as we purchase more equipment.

So that?s why your IPO?

Gremach Infrastructure Equipments & Projects Ltd. has announced a Rs590mn initial public issue in the price band of Rs75-90 per Rs10 share. Subscriptions are open till March 14. The issue proceeds would be utilized to acquire high-end multipurpose equipments used in Ports, Mining and other Road Construction Equipments not readily available. The proceeds will also be utilized for expanding our existing operations.

Will the entire expansion and equipment acquisition be funded by only the IPO?

We have received a sanction for term loan of Rs145mn from State Bank of India, Industrial Financial Branch, and Mumbai for acquisition of new equipments.

Give us an idea of your financials

The turnover of the company has grown to Rs758.51mn with the net profit of Rs40.11mn in FY06 from Rs187.84mn with the net profit of Rs16mn in FY02 respectively. For the current nine months ended December 31, 2006, the turnover was Rs832.33mn with net profit ofRs59.46mn.

What kind of equipment do you currently own?

The company presently has excavators, PTR, dumpers, etc. We also own Electronic Sensor Pavers, mechanical pavers, Kerb Laying Machine, concrete batching and mixing plant, weigh batchers, Vibro Compactor, tandem vibratory roller, front end wheel loader, bitumen spreaders, rock breakers, dozers, automatic road marking machine and tunneling boomer.

Interview of Mr. Rishiraj Agarwal