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Ahluwalia May Spend 1 Billion Rupees Buying Construction-Related Companies

Ahluwalia Contracts Ltd., an Indian company that helped build athletes’ housing for the Commonwealth Games, plans to spend as much as 1 billion rupees ($22 million) buying companies involved in the construction business.

“The trend for all construction companies is positive as the government is bullish on infrastructure spending,” Chief Financial Officer S.K. Sachdeva said in a phone interview today.

Ahluwalia’s earnings may be buoyed by increased government spending on new roads, ports, schools and mass transit systems. India’s Planning Commission estimates $1 trillion needs to be spent in the five years from 2012 on such projects to narrow the gap with China, the world’s fastest growing major economy.

The shares rose 2.8 percent to 209 rupees as of 2:06 p.m. local time. The stock has added 8.6 percent this year, compared with the Bombay Stock Exchange BSE500 Index’s 16 percent gain.

The company plans to buy “mid-sized” companies specializing in building water treatment systems, concrete roads and power plants, Sachdeva said.

Ahluwalia got new orders worth 4.76 billion rupees, it said in a stock exchange filing today. Sachdeva said he expects to get another 3 billion rupees in orders to build hotels, residences and hospitals by early November.

To contact the reporter on this story: Hemal Savai in Mumbai at at hsavai@bloomberg.net.

To contact the editor responsible for this story: Stephen Foxwell at at sfoxwell@bloomberg.net.

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