GMR Infrastructure is trading lower by 2.2% at Rs 20 on the Bombay stock exchange (BSE) after the company exited the contract for constructing India's largest highway project.
The company has terminated the concession agreement on its Rs 7,500 crore, 555-km highway project connecting Rajasthan and Gujarat, India’s largest.
GMR Infrastructure reached the decision after weeks of discussions with the National Highway Authority of India (NHAI), over getting various statutory clearances for the project.
According to reports, the company is understood to have walked out of this project after NHAI failed to get the required environmental clearnaces, notification of toll and denotification of land among others for GMR to proceed with the project execution. GMR Infrastructure, in fact had even achieved financial closure for this project and a third of the equity requirement was also ready.
GMR had won the project during September 2011 against stiff global competition. The project was expected to beef up GMR's revenues substantially.
The project was for the six-laning of the 555-km Kishangarh-Udaipur-Ahmedabad stretch, the country’s first expansion of a mega highway. This project was to have been implemented through a design-build-finance-operate-and-transfer model.
This section is a part of the Delhi-Mumbai (Golden Quadrilateral) corridor and goes through the newly announced Delhi-Mumbai Industrial Corridor (DMIC) project, which has very high growth potential for commercial and tourist traffic.
As many as 8,12,000 shares have changed hans on the BSE compared to 15,80,000 shares that were traded daily in the past two weeks. The stock opened at Rs 20.25 and touched the intra-day low of Rs 20.00.
Explore Business Standard