GVK Power may Gain up to 20% on Navi Mum­bai Air­port Bid Win

The Economic Times - - Smart -

Mum­bai: Shares of GVK Power & Infrastructure could rally up to 20% in the next two weeks as the com­pany on Mon­day won the bid to de­velop the Navi Mum­bai air­port, edg­ing out the only other bid­der GMR Infrastructure. GVK Power se­cured the project by of­fer­ing a higher rev­enue share of 12.60% to the project im­ple­ment­ing author­ity — City and In­dus­trial De­vel­op­ment Cor­po­ra­tion (CIDCO) as op­posed to GMR, which of­fered 10.44% of rev­enue share. “GVK shares would rally to some ex­tent on Tues­day as this is an im­por­tant de­vel­op­ment for the com­pany. The bid win could boost sen­ti­ments around the stock, it has been un­der pres­sure for a long time,” said Akash Jain, Aj­con Global Ser­vices. The stock of GVK Power fell 1.3% on Mon­day, while that of GMR de­clined 2.8%. Shares of GVK have fallen 2% and GMR’s have risen 30%in the last one year against the Sensex’s gain of 23.3% in the same pe­riod.

An­a­lysts have a neg­a­tive out­look on both the infrastructure com­pa­nies due to heavy debts and con­sid­er­able fall in share prices since 2010. They are ap­pre­hen­sive about how the fund­ing for the ₹ 16,000-crore project would be se­cured by GVK Power and raised con­cerns over the ef­fec­tive mon­eti­sa­tion of land as­sets.

“The com­pany does have the ex­e­cu­tion ca­pac­ity no doubt, but is quite as­set heavy, so it has to be seen how it can se­cure fund­ing for the project,” said Jain of Aj­con.

An­a­lysts are ap­pre­hen­sive about how the fund­ing for the project will be se­cured by co

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.