HCC extends gain to hit 52-week high

The stock hit high of Rs 32.60, rallied 42% in past two trading sessions from Rs 22.95 on Tuesday.

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Shares Hindustan Construction Company (HCC) has rallied 19% to Rs 32.60, also its 52-week high on the BSE, after the Union Cabinet's decision requiring the government agencies to pay 75% of arbitral awards would result in company’s debt being reduced by half.

In past two trading sessions, the stock of HCC rallied 42% from Rs 22.95 on Tuesday, August 30, 2016. The trading volumes on the counter jumped nearly six-fold with a combined 51.41 million shares changed hands on the NSE and BSE till 10:47 am.

The Cabinet on Wednesday approved an array of measures to help quickly resolve disputes, pump in liquidity and deal with stressed assets. 

“HCC has arbitration awards for over Rs 3,200 crore and with the cabinet decision, the company will get 75% of this amount immediately. Similarly, claims worth around Rs 5,000 crore are in arbitration process. The cabinet decision will further help HCC to secure these awards within duration of 12 months,” HCC said in a press release.

HCC has a standalone debt of Rs 4,900 crore. The Cabinet decision will help the company to substantially reduce this amount, the company added.

HCC will immediately be able to reduce its debt by almost half as a result and within 12 to 24 months, materially reduce it even further,  said Mr Ajit Gulabchand, HCC's Chairman and Managing Director.