GVK scrip jumps 16% to Rs 8.61 on Friday

Company had in June announced the sale of its residual stake in BIAL for Rs 1,290 cr

GVK Power and Infrastructure's shares jumped 16 per cent on Friday to Rs 8.61 on the BSE exchange. The rise has been 65 per cent over a month, after the company announced residual stake sale in Bangalore International Airport Ltd (BIAL) for Rs 1,290 crore on June 2.

Though a highly indebted company, GVK did not figure in the list of 12 major bad loan accounts that were listed by the Reserve Bank of India (RBI) earlier this month for initiating of insolvency proceedings. This is expected to keep investor hope alive on the company's possible turnaround, which also hinges on its being able to undertake the Navi Mumbai airport project despite its current debt woes.

The energy-to-airports conglomerate has exited the profitable BIAL by selling its entire stake -- 33 per cent last year and the remaining 10 per cent earlier this month -- to the Prem Watsa-led Fairfax India Holdings, only to reduce debt and to focus on the Navi Mumbai project. GVK already runs the existing airport in Mumbai.

The energy business, significant contributor to the GVK group's continued losses, and stranded Australian coal mine investments, remain a challenge for the company as it looks to re-orient its business focus in favour of airports.

In February the company had won the bid for the Rs 16,000-crore Navi Mumbai project from the Maharashtra government. Except for this one, the company had not gone for any new venture in the past four years, owing to the debt problems.

The consolidated net loss in 2016-17 was Rs 1,343 crore, on revenue of Rs 4,049 crore.