GMR infrastructure rose 2.89% to Rs 33.80 at 10:29 IST on BSE after favorable verdict from the arbitration tribunal with regard to concession agreement for modernization and operation of Ibrahim Nasir International Airport.
The announcement was made during market hours today, 19 June 2014.
Meanwhile, the S&P BSE Sensex was up 5.24 points or 0.02% at 25,251.49.
On BSE, so far 10.34 lakh shares were traded in the counter as against average daily volume of 21.42 lakh shares in the past one quarter.
The stock hit a high of Rs 34.40 and a low of Rs 33.10 so far during the day. The stock hit a 52-week high of Rs 38.30 on 10 June 2014. The stock hit a record low of Rs 10.65 on 6 August 2013.
The stock had outperformed the market over the past one month till 18 June 2014, surging 16.08% compared with the Sensex's 4.66% rise. The scrip had also outperformed the market in past one quarter, jumping 50.34% as against Sensex's 15.64% rise.
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The large-cap company has equity capital of Rs 389.24 crore. Face value per share is Re 1.
GMR Infrastructure (GMR Infra)'s subsidiary GMR Male' International Airport (GMIAL) had entered into a concession agreement with Government of Maldives (GoM) and Maldives Airport Company (MACL) for modernization and operation of Ibrahim Nasir International Airport (INIA) in 2010. The contract was unilaterally terminated by GoM and GoM initiated arbitration proceedings seeking a declaration that the concession agreement was void ab initio on 29 November 2012. GMIAL had disputed this wrongful termination.
After detailed proceedings lasting for more than 18 months, the tribunal has now issued an award and declared that the concession agreement was valid and binding and was not void for any mistake of law or discharged by frustration.
The tribunal said that GoM and Maldives Airport Company (MACL) repudiated the concession agreement by their notices to GMIAL on 29 November 2012 and the repudiation was accepted by GMIAL. The collection of Airport Development Charges (ADC) and Insurance Surcharge (IS) as allowed in the concession agreement was lawful under Maldivian law, the tribunal said.
The agreement to adjust the shortfall arising out of non-collection of ADC and IS from the concession fee was lawful and binding on MACL and GoM, the tribunal said.
GoM was not discharged as guarantor by the 5 Jan agreement or otherwise, the tribunal said. GoM and MACL are jointly & severally liable in demands to GMIAL for loss caused by wrongful repudiation of the agreement as per the concession agreement. The tribunal directed GoM and MACL to pay $4 million to GMIAL by way of costs within 42 days.
GMR Infra said that it has always been its firm belief that the cancellation of its concession agreement amounted to wrongful repudiation by GoM and the tribunal has upheld this stand.
It is to be noted that the arbitration proceedings are private and confidential, however the company is disclosing the above information in conformity with the regulatory requirements, GMR Infra said in a statement.
On consolidated basis, GMR Infrastructure's net profit surged 102% to Rs 1170.18 crore on 14% growth in net sales to Rs 2930 crore in Q4 March 2014 over Q4 March 2013.
GMR Infrastructure is a global infrastructure major with interests in Airports, Energy, Highways and Urban Infrastructure sectors.
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