India is one of the fastest growing countries in regard to technology expansion.  The economy of India is the twelfth largest in the world, with a GDP of around $1 trillion in 2008. It recorded a GDP growth rate of 9.1% for the fiscal year 2007–2008 which makes it the second fastest emerging economy, after China, in the world.  With this in mind, investing in companies that are helping to build the corporate and governmental infrastructure would be a very intelligent decision. That is why today I want to discuss India Globalization Capital, Inc. (IGC), IGC trades on the American Stock Exchange at the symbol: IGC (click here for the investor profile).  IGC has successfully positioned themselves in the high growth infrastructure sector in India.

India’s economy is projected to become the third largest in the world, and the Government of India (GoI), expects to spend $475 billion on infrastructure by 2012. The GoI is providing business incentives and tax incentives to build out the Indian infrastructure over 10 years, as well as the privatization of certain key assets including highways, airports, sea ports, power plants, etc. Reflecting India’s push to build out its infrastructure, IGC has an order book of $382M and $350M in ongoing bids. Within the next four months, the company expects to increase its order book to upwards of $700M. IGC is one of the few ways to invest in Indian infrastructure being the only Indian infrastructure company listed in the United States of America.

IGC is undervalued, currently trading at $3.00, which is less than 4x it’s 2009 earnings estimate in a sector that trades on average 30x earnings; therefore, the fair market value for this stock is potentially $27.60, representing upside of over 800% for investors. With their seasoned management team, GoI Incentives, and India’s rapid, long term growth, India Globalization Capital is primed for strong growth and upside potential for investors. RedChip Independent Research recently published a report on IGC with a target price of $9.20. Vivek Srivastava, RedChip Equities analyst stated, “We believe the Company’s superior technical knowledge, wide spectrum of service offerings, and reputation for quality and timely execution of projects will enable IGC to garner a unique niche in the booming infrastructure industry in India.”

IGC is continually expanding their business and revenues.  See below for some examples of how they are accomplishing their success:

August 7, 2008

They were awarded a $16.5 million surface mining contract in India.  This three-year contract will start early next year and has increased IGC’s contract backlog to $382 million.

July 7, 2008

IGC, through its subsidiary Sricon, was awarded a $4.2 million contract by Vijay Engineering for the civil engineering and construction of a housing complex in the city of Kalburgi (Bangalore, India).

June 12, 2008

Sricon was awarded a $103 million construction contract from Hindustan Steelworks Construction Limited (HSCL) for the construction of rural roads in the state of Madhya Pradesh (MP).

June 2008

The Company was awarded a $12.75 million construction contract by Sahara Infrastructure and Housing for civil engineering and construction in a 106 acre planned township in Nagpur City, India.

May 30, 2008

Sricon was awarded a $4 million construction contract for civil engineering and construction in a housing complex located in Bangalore, India.