Over the last 15 years I have been to India on numerous occasions and every time I visit, it seems that the country is perpetually changing especially in metropolitan cities like Mumbai (formerly known as Bombay). The amount of construction that’s taking place is simply astounding. On a recent visit, I noticed a lot of repair work and renovations to major highways. I was really impressed by a four lane “sea link” bridge constructed to connect two different parts of Mumbai over the Arabian Sea, thereby considerably easing traffic in the city. Gone are the days where poverty and slums were the main sights. Shopping malls, plazas, state-of-the art cinemas, and high-rise buildings are now showcasing India’s development as the country is starting to become a major player in the modern 21st century world.

To facilitate this rapid infrastructure advancement, companies like India Globalization Capital (NYSE Amex: IGC) are playing a major role along with the Government of India (GoI). Through its IGC Materials subsidiary, IGC operates in the rapidly growing materials and infrastructure industry in India. The Company produces crushed rock for construction projects and recently announced that it has commissioned the first of two quarries for commercial production in Maharashtra, India (Mumbai is the capital of the state of Maharashtra).

The combined capacity of IGC two quarries is estimated to be 10 to 11 million metric tons of rock aggregate representing a potential revenue stream of $40 million over the next 5 years.

According to the Freedonia Group, India was the fourth largest aggregate market in the world in 2006, with annual demand of up to 1.1 billion metric tons. Aggregate sales in India rose an average of 7.7% annually during the past 10 years compared to a global average of approximately 4.4%, with roughly 40% of the demand being for crushed stone. With India poised to accelerate its infrastructure build out, the demand for building materials such as rock aggregate is expected to increase substantially. The government of India plans to invest close to $360 billion in the next three years in an effort to build out the country’s infrastructure. Plans for the construction of 36,500 kilometers of roads and highways have already been implemented.

As the Indian economy rebounds, the government is anxiously getting back to the massive infrastructure projects that had stalled during the global recession. At the top of the list is the construction and repair of the roads, bridges, and transportation infrastructure that remains vital to maintaining the country’s significant economic growth. IGC is one way for investors to play the often overlooked but critical component to the construction efforts of each building project. A simple but profitable resource: rocks.

Disclosure: The subject securities are clients of RedChip Companies, Inc. RedChip Companies, Inc., employees and affiliates may have positions and affect transactions in the securities or options of the issuers mentioned herein. For full financial disclosures for all RedChip clients, please visit http://www.redchip.com/disclosures.asp?src=rcv.