RITES inform foreclosure of JV in Gujarat; stock positive

Government of India enterprise, RITES Ltd foreclosed its joint venture with BNV Gujarat Rail private limited, which it had entered into in 2016.

The company entered the joint venture which also had a participation of Shapoorji Pallonji Roads (SPRPL) and PCM Cement Concrete Pvt Limited. The major purpose of the agreement was the development and operation of Bhuj-Naliya-Vayor rail project under PPP model of Indian Railways. The JV has a shareholding divided on holding pattern of RITES-26 per cent, SPRPL-67.5 per cent and PCM holding for 6.5 per cent. The press note further added that the decision was taken by BNV not to go ahead with the project. With a very minimal amount invested, there would not be any adverse impact upon the termination of the agreement.

On the operational front, the company has already performed well with a double digit growth in sales as well as margins. For the third quarter, top-line grew by 16 per cent while, margins stood at 34 per cent. The order book as of the end of the quarter stood at Rs 5,882 crore.

At 1.00 pm, the stock was trading up by 7.5 per cent at Rs 244.35 per share on BSE.