IL&FS Transportation offloads stake in NAM Eway and buys stakes in Jorabat Shillong Eway

A company promoted by Infrastructure Leasing & Financial Services, IL&FS Transportation Networks has signed a definitive agreement with Ramky Infrastructure for sale of entire stake in NAM Expressway and acquire 50 per cent stake in Jorabat Shillong Expressway, on Thursday. The stock of IL&FS Transportation has surged more than 8 per cent during Friday’s trade, bouncing back from its 52-week low level hit in the previous trading session.

IL&FS Transportation Networks sold 11,67,50,000 equity shares of Rs. 10 each, i.e. 50 per cent stake in NAM Expressway, while acquires 4,20,00,000 equity shares of Rs. 10 each, i.e. 50 per cent stake in Jorabat Shillong Expressway, both giving net consideration receivable to IL& FS Transportation Networks at Rs. 43.20 crore. With this, Jorabat Shillong Expressway becomes the company's wholly-owned subsidiary.

Earlier, IL&FS Transportation Networks posted a net loss of Rs. 248 crore in Q1FY19, registering its highest ever loss on a quarterly basis. The company also holds Debt/Networth of 4.3x in FY18.

Also, the national insurer, Life Insurance Corporation of India (LIC) is contemplating plans to rescue IL&FS, its promoter company, which might benefit the company. If bailed out, this will be the biggest and also the first private enterprise to be rescued.

Meanwhile, the stock is off its 52-week low and has breached its 23.6 per cent retracement level of the downward rally from 45.45 to 32.60. Today’s upsurge is supported by rising volumes and 14-period RSI positive crossover.