GR Infraprojects witnessed a 4% surge in its stock price on 24th September, following the announcement of securing a major contract worth ₹903.5 crore. The infrastructure company emerged as the lowest bidder for a project under the second phase of the Nagpur Metro Rail Project. This contract win is seen as a significant milestone, offering a boost to the company’s market performance, thus attracting more attention from those involved in share market investment.
Project details and significance
The contract secured by GR Infraprojects involves the design and construction of a 17.624-kilometre elevated metro viaduct. It includes a unique double-decker section with a vehicular underpass spanning 1.14 km. Awarded by Maharashtra Metro Rail Corporation Ltd (Maha Metro), the project falls under the reach-1A section of Nagpur Metro’s phase-2 expansion. Additionally, the project involves the construction of two railway spans, measuring 79 metres and 100 metres, respectively.
The total value of the contract is ₹903.5 crore, and it will be executed under the engineering, procurement, and construction (EPC) model. The timeline for completion is set at 30 months. With GR Infraprojects securing this deal, the company solidifies its position in the infrastructure industry, demonstrating its ability to compete in large-scale government projects.
Financial implications of the contract
The financial bids were opened on 23rd September 2024, with GR Infraprojects winning the contract due to its competitive pricing. The immediate response in the share market highlights investor confidence in the company’s prospects, especially as the infrastructure sector continues to attract significant government and private investments.
Shares of GR Infraprojects were trading 4% higher, reaching ₹1,733.95 in early trading on the NSE. This boost follows a year in which the stock has risen by 53%, far outpacing Nifty’s 19% increase over the same period. In the last 12 months, the stock price has increased by 39%, while Nifty rose by 31%. The company’s stock made its debut on the bourses in July 2021 and has since undergone some corrections, though it continues to show resilience in the market.
Recent developments in the company
In addition to securing the Nagpur Metro contract, GR Infraprojects recently completed the sale of its wholly-owned subsidiary, GR Aligarh Kanpur Highway Private Limited (GAKHPL). The sale, which concluded on 17th September 2024, was made to Bharat Highways InvIT for ₹98.6 crore. This transaction represents a strategic decision by the company to streamline its operations and focus on larger projects.
GAKHPL, contributing 1.99% to GR Infraprojects’ consolidated income and 2.10% to its consolidated net worth as of 31st March 2024, will no longer be a subsidiary. The sale, conducted as a related-party transaction, aligns with SEBI regulations and ensures arm's length principles were maintained.
Outlook for investors
The recent developments, including the Nagpur Metro contract win and the divestment of GAKHPL, demonstrate GR Infraprojects’ commitment to growth and efficiency. The company's ability to secure major contracts positions it favourably in the infrastructure sector, which is a key driver of economic development in India. The positive stock performance is a clear indicator that share market investment in the infrastructure sector remains lucrative, particularly in companies like GR Infraprojects that are involved in government-backed projects.
With its solid track record, strategic decisions, and expanding portfolio, GR Infraprojects is likely to remain a strong player in the market, providing promising opportunities for investors.
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