Jaypee sells stake in Gurgaon expressway

DS Constructions picks up the stake for around Rs 46 crore.

DS Constructions has bought out Jaiprakash Industries (now called Jaiprakash Associates after its reverse merger into Jaypee Cement) in Jaypee-DSC Ventures Ltd, the company implementing the Delhi-Gurgaon access-controlled highway project, for about Rs 46 crore.

Jaiprakash Industries had a controlling 51 per cent stake in the venture and is now left with a negligible stake in the joint venture company, a source familiar with the deal told Business Standard.

"It is proposed not to change the name of the company. That is why some shares have been left with Jaiprakash Industries," the source said.

DS Constructions is a part of the London-based $450 million DS Group that has business interests in infrastructure development, real estate, information technology, hotels & leisure management and retailing.

In India, the group's thrust is in retailing and infrastructure. It runs the Ebony chain of retail stores in the country.

The joint venture had bagged the prestigious project on National Highway-8 connecting Delhi with Gurgaon last year after quoting the lowest price amongst a handful of Indian and overseas bidders.

The Rs 555-crore expressway, covering a distance of 27.7 km with six flyovers and six underpasses, is scheduled to be completed by November 2005.

This section is one of the busiest stretches in the country with over 150,000 passenger vehicles plying on it every day. The project is coming up on a build, operate and transfer contract under the direct tolling method.

The source said Jaiprakash Industries could have lost interest in the project as it was relatively small compared to the huge hydel power projects it has in hand.

"There was also a clash of work cultures between the two groups," the source added.