Multibagger power company gets Rs 850 crore as first tranche of Rs 1,387.21 crore settlement with NHAI; details inside

The stock gave multibagger returns of 365 per cent in just 1 year whereas BSE Small-cap Index is up by 60 per cent. I

GMR Power & Urban Infra Ltd (GPUIL) informed on the status of the settlement of claims by GMR Hyderabad Vijayawada Expressways Private Limited (GHVEPL), a subsidiary of the company with National Highways Authority of India (NHAI). In this regard, the below update is being furnished.

GHVEPL had executed a Concession Agreement (‘Agreement’) in October 2009 to construct, operate and maintain a two-lane 181.50 km stretch between Hyderabad and Vijayawada on the NH-65. In view of the significant loss of revenue on account of the bifurcation of the stretch between two states i.e. Telangana and Andhra Pradesh, post the date of commissioning of the project, GHVEPL had raised claims in terms of the agreement, against NHAI, seeking compensation against such losses, arising due to change in law.

While the matter is sub judice, both parties have decided to amicably settle all the disputes without further intervention from the court/tribunal. In this regard, a settlement was agreed between both parties as per which NHAI agrees to pay an amount of Rs 1,387.21 crore to GHVEPL as a claim in two tranches and the project will be handed back to NHAI on July 01, 2024 (Handover Date).

Further, in terms of the settlement, GHVEPL has received claims of Rs 850 crore as the first tranche which will majorly be utilized towards total closure of loans with its consortium of lenders. The balance of the first tranche money and the total second tranche amount of Rs 537.21 crore to be received on the Handover Date, will be available with the Company for further reduction of GPUIL corporate debt and investment in the growth of other businesses of GPUIL.

Earlier, GMR Smart Electricity (GSEDPL) won massive smart meter projects in Uttar Pradesh, India, totalling 7.57 million meters across Agra, Aligarh, Varanasi, Azamgarh, Prayagraj, and Mirzapur. Partnering with Bosch for expertise and investment, GSEDPL will set up dedicated entities to install the meters. The project value reaches Rs 7,593 crore with an implementation period of around 2 years and an operation period of nearly 8 years.

Also Read: After Rs 7,000 crore orders from Adani Group, this heavy electrical equipment company likely to bags another huge order worth Rs 13,300 crore from Damodar Valley Corporation

About the GMR Power & Urban Infra Ltd (GPUIL)

GMR Power & Urban Infra Ltd (GPUIL), a subsidiary of the GMR Group, is a leading Indian company with expertise in energy, urban infrastructure, and transportation. They operate across three main business segments: energy generation with a balanced fuel mix including coal, gas, hydro, solar, and wind; road and transportation projects encompassing highways, railways, metros, and airstrips; and Engineering, Procurement, and Construction (EPC) services for various infrastructure sectors. Currently, energy is their biggest revenue driver, followed by roads & transportation, and then EPC. They have a strong track record with over 3,000 MW of installed power generation capacity and over 1,800 lane kilometres of operational roads & highways. Notably, they are nearing completion of a major EPC project for a section of the Eastern Dedicated Freight Corridor.

Stock Update

On Friday, shares of GMR Power and Urban Infra Limited zoomed 4.60 per cent to an intraday high of Rs 87.94 per share from its previous closing of Rs 84.07. The stock gave multibagger returns of 365 per cent in just 1 year whereas BSE Small-Cap Index is up by 60 per cent. Investors should keep an eye on this multibagger small-cap stock under the radar.

Disclaimer: The article is for informational purposes only and not investment advice.