Reliance Infrastructure rose 5.1% to Rs 616.15 at 15:10 IST on BSE after the company said it has won arbitration awards for two road projects of Rs 170 crore and that projects worth Rs 14000 crore are under advanced stages of arbitration.
Meanwhile, the BSE Sensex was up 144.29 points, or 0.51%, to 28,567.77.
On BSE, so far 7.06 lakh shares were traded in the counter, compared with average daily volume of 4.27 lakh shares in the past one quarter. The stock hit a high of Rs 616.90 and a low of Rs 584 so far during the day. The stock hit a 52-week high of Rs 622.05 on 5 January 2016. The stock hit a 52-week low of Rs 313.20 on 8 September 2015. The stock had underperformed the market over the past 30 days till 1 September 2016, rising 2.53% compared with 2.62% rise in the Sensex. The scrip had, however, outperformed the market in past one quarter, rising 12.07% as against Sensex's 5.89% rise.
The large-cap company has equity capital of Rs 262.99 crore. Face value per share is Rs 10.
Reliance Infrastructure (RInfra) said it welcomed the series of initiatives approved by the Cabinet Committee on Economic Affairs (CCEA) to revive the construction sector. CCEA on 31 August 2016 approved a series of initiatives to revive the construction sector. As per the new initiatives, CCEA allowed contractors to move to the new speedier arbitration process, approved release of 75% of the amount in dispute against margin free bank guarantee and provided for a conciliation board comprising of independent subject experts in order to ensure speedy disposal of pending or new cases.
Welcoming the move Lalit Jalan, CEO, Reliance Infrastruture, said that this landmark initiative by the CCEA will boost the stressed infrastructure sector and also help infuse much required liquidity in the system. It is a very positive and bold move by government to help revive the stalled projects which suffer due to long settlement periods, Jalan said.
Reliance Infrastructure said it has already won arbitration awards for two road projects of Rs 170 crore. In addition, over Rs 14000 crore are under advanced stages of arbitration for various projects.
Under the new initiative approved by CCEA, in case where arbitration award is in favour of the concessionaire/contractor but public sector undertaking (PSU)/Government agencies have challenged it, 75% of award amount will have to be released to concessionaire/contractor against bank guarantee. The move will ensure that projects are not stranded due to long arbitration disputes between concessionaire/contractor and government agencies and lack of funds.
Lalit Jalan further added that CCEA has created an enabling framework for government agencies/PSUs to release 75% of arbitration award to concessionaires/contractors, without worrying about subsequent scrutiny. He also lauded the government's initiative of allowing the disputing parties to migrate to new Act even if arbitration was initiated prior to enactment of amended Arbitration Act of 2015.
Under the new scheme of arrangement, all PSUs/departments may consider setting up conciliation committees comprising of independent experts to ensure speedy disposal of pending or new cases.
Reliance Infrastructure's consolidated net profit rose 43.7% to Rs 659.85 crore on 3.2% fall in net sales to Rs 4260.87 crore in Q4 March 2016 over Q4 March 2015.
RInfra is one of the largest infrastructure companies, developing projects through various special purpose vehicles (SPVs) in several high growth sectors such as power, roads and metro rail in the infrastructure space and the defence sector.
Powered by Capital Market - Live News
Disclaimer: No Business Standard Journalist was involved in creation of this content
