Intraday Spotlight: This penny stock hits 20 per cent upper circuit; heres why!

Divestment in the company’s associates drives the stock price

Bharat Road Network Ltd (BRNL), a Small-Cap company engaged in building roads, and other civil constructions, has hit the upper circuit of 20 per cent today from its previous close of Rs 26.80, as the company has announced divestment in one of its ‘Associate’ company- Shree Jagannath Expressways Pvt Ltd (SJEPL). The company will be selling its entire stake of 40 per cent in this transaction for a sum of Rs 94.11 crore.  

Apart from this, SJEPL has claims against NHAI of about Rs 700 crore pending conciliation. As per the terms of divestment, BRNL will be liable for the proportionate i.e. 40 per cent of claims (Rs 700 crore) on successful completion of conciliation. Also, this is not a related party transaction. The stock opened at Rs 28.20 and has made its day high of Rs 32.15 (+28 per cent). As of 11:00 am today, trading in the stock has been halted. 

For a company with annual revenues of Rs 216 crore, these proceeds and contingent gains are of significant value which has reflected in the stock price. For Q4 FY22, the company reported a decline of 28.5 per cent and 321 per cent in revenues and net profit respectively.  

BRNL is a road BOT company in India, focused on the development, implementation, operation and maintenance of roads/highways projects. The company was incorporated in 2006 as a developer and operator for highways, roads and related projects on a BOT basis.  

The stock has a 52-week high and low of Rs 59.45 and Rs 24.00, respectively.