Construction equipment manufacturer AJAX engineering has acquired a 20-acre land parcel in Bangalore and will invest Rs 100 crore to develop a new manufacturing facility as it aims to expand operations in anticipation of greater demand for its equipment post lockdown.
The company is likely to get orders from government infrastructure projects post lockdown and from the real estate developers in the residential segment who are in a hurry to complete the projects after facing delays due to lockdown.
“We have acquired 20 acres from Karnataka Industrial Areas Development Board (KIADB) at Rs 34 crore and will invest another Rs 60-70 crore to develop the facility. The demand from the commercial real estate sector has slowed as companies have focused toward work from home,” said Jagadish Bhat, Managing Director & CEO of AJAX Engineering.
The concrete equipment player has manufacturing facilities at Doddaballapur and Gowribidanur in the city outskirts. As per the industry players, post lockdown recovery is better-than-anticipated due to incremental order inflows from Tier 2 and Tier 3 cities, wherein the impact of Covid-19 was short-lived and construction activity went back to normalcy relatively faster.
“Time will tell where we are headed but in commercial real estate, new projects are not taking off. However the residential segment is doing well. Having missed the deadline, they are in a hurry to complete projects,” Bhat said.
The company has currently over 19,000 equipments at construction sites across the country in various sectors. It has dedicated service centres in Hyderabad, Hubli, Madurai, Raipur, Surat, Faridabad, and Ranchi.
According to a report by Motilal Oswal Financial Services Limited (MOFSL) in South India, the construction activity is almost back at pre-COVID levels, while in North India it’s at 80% of earlier levels. Recovery in construction activity in Mumbai, India’s largest market has been at just 50–60% levels as the fear of the pandemic is high amongst the migrant labor.