IJM defers plan to float unit on Mumbai bourse

IJM Corp Bhd, the country's third largest builder, has postponed plans to float its subsidiary on the Bombay Stock Exchange, research firm CLSA said in a report.

The builder planned to raise as much as RM200 million by selling shares in IJM (India) Infrastructure Ltd, the largest foreign-owned company in the infrastructure and construction sector in India.

The listing is important, as IJM wants to completely shed the foreign-owned firm tag in order to be in a position to bite a bigger chunk of India's planned US$1 trillion (RM3.23 trillion) investments in infrastructure spending up to 2017.

CLSA notes that IJM's track record is so strong in India that its operating subsidiary is considered as a local company in bids for projects, while most Malaysian companies found the operating environment too hot to handle despite the massive opportunities available.

It initially targeted to list IJM (India) by the fourth quarter of last year, but now it looks like the initial public offer plan may have to be delayed by at least a year.

The joint listing of its construction and property divisions has been delayed to 2009 due to a court case with the state government for one of its property projects, which is pending resolution, the CLSA report stated.

Business Times understands that the case involves units within the state government of Andhra Pradesh over development land for a housing project in the state.

IJM has been banking on its investments in India to sustain its construction business, with nearly a quarter of the IJM group order book value filled by jobs from there.

Indian projects comprise 23 per cent of IJM's RM6.5 billion order book, and the builder also has a portfolio consisting of stakes in four toll roads and a power plant in the sub-continent.