 "Infra stocks extend rally; HCC, Patel Engineering surge over 30% in three days")
Shares of infrastructure companies were trading higher for the third straight trading sessions after the Cabinet on Wednesday approved an array of measures to help quickly resolve disputes, pump in liquidity and deal with stressed assets.
Since then, Hindustan Construction Company (HCC) and Patel Engineering said that the Union Cabinet's decision requiring the government agencies to pay 75% of arbitral awards would result in company’s debt being reduced by half.
“HCC has arbitration awards for over Rs 3,200 crore and with the cabinet decision, the company will get 75% of this amount immediately. Similarly, claims worth around Rs 5,000 crore are in arbitration process. The cabinet decision will further help HCC to secure these awards within duration of 12 months,” HCC said in a press release.
Since then, Hindustan Construction Company (HCC) and Patel Engineering said that the Union Cabinet's decision requiring the government agencies to pay 75% of arbitral awards would result in company’s debt being reduced by half.
“HCC has arbitration awards for over Rs 3,200 crore and with the cabinet decision, the company will get 75% of this amount immediately. Similarly, claims worth around Rs 5,000 crore are in arbitration process. The cabinet decision will further help HCC to secure these awards within duration of 12 months,” HCC said in a press release.
Patel Engineering said that it has won arbitration award in excess of Rs 2,500 crore. With the recent Cabinet decision, the company will get 75% of this amount immediately which will be utilized to retire debt.
Further, claims approximately Rs 5,000 crore are in arbitration process and are expected to be monetized with next 12 to 18 months based on the Cabinet decision. The same will be utilized to reduce the debt even further, it added.
The stock of HCC hit a fresh 52-week high of Rs 37.90 on Friday in intra-day trade. It zoomed 65% in past three trading sessions from Rs 22.95 on Tuesday, August 30, 2016.
Patel Engineering is locked in upper circuit of 20% at Rs 64.50, extending its past two day’s 15% rally on the BSE.
C&C Constructions, Punj Lloyd, IL&FS Engineering, BL Kashyap & Sons and IVRCL were up 15% -44% on the BSE, as compared to 0.46% rise in the S&P BSE Sensex.
| Company | 30/08/2016 | LTP 1006 | %chg |
| HCC | 22.95 | 37.10 | 61.66 |
| C & C Constrn. | 15.00 | 21.60 | 44.00 |
| Patel Engg. | 46.85 | 64.50 | 37.67 |
| Punj Lloyd | 20.75 | 25.05 | 20.72 |
| IL&FS Engg. | 47.50 | 56.00 | 17.89 |
| B.L.Kashyap | 20.15 | 23.60 | 17.12 |
| IVRCL | 4.83 | 5.55 | 14.91 |
| Unity Infra. | 11.49 | 13.06 | 13.66 |
| Gammon India | 14.80 | 16.55 | 11.82 |
| Sadbhav Infra. | 97.00 | 107.10 | 10.41 |
| Simplex Infra | 294.00 | 324.00 | 10.20 |
| Sensex | 28343.00 | 28474.00 | 0.46 |
| LTP: Last traded price on BSE at 10:06 am. | |||