Infra stocks extend rally; HCC, Patel Engineering surge over 30% in three days

C&C Constructions, Punj Lloyd, IL&FS Engg, BL Kashyap and IVRCL were up 15% -44% on the BSE in past three days.

Shares of infrastructure companies were trading higher for the third straight trading sessions after the Cabinet on Wednesday approved an array of measures to help quickly resolve disputes, pump in liquidity and deal with stressed assets.

Since then, Hindustan Construction Company (HCC) and Patel Engineering said that 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.

“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.

Patel Engineering said that it has won arbitration award in excess of Rs 2,500 crore. With the recent Cabinet decision, the company will get 75% of this amount immediately which will be utilized to retire debt.

Further, claims approximately Rs 5,000 crore are in arbitration process and are expected to be monetized with next 12 to 18 months based on the Cabinet decision. The same will be utilized to reduce the debt even further, it added.

The stock of HCC hit a fresh 52-week high of Rs 37.90 on Friday in intra-day trade. It zoomed 65% in past three trading sessions from Rs 22.95 on Tuesday, August 30, 2016.

Patel Engineering is locked in upper circuit of 20% at Rs 64.50, extending its past two day’s 15% rally on the BSE.

C&C Constructions, Punj Lloyd, IL&FS Engineering, BL Kashyap & Sons and IVRCL were up 15% -44% on the BSE, as compared to 0.46% rise in the S&P BSE Sensex.

Company	30/08/2016	LTP 1006	%chg
HCC	22.95	37.10	61.66
C & C Constrn.	15.00	21.60	44.00
Patel Engg.	46.85	64.50	37.67
Punj Lloyd	20.75	25.05	20.72
IL&FS Engg.	47.50	56.00	17.89
B.L.Kashyap	20.15	23.60	17.12
IVRCL	4.83	5.55	14.91
Unity Infra.	11.49	13.06	13.66
Gammon India	14.80	16.55	11.82
Sadbhav Infra.	97.00	107.10	10.41
Simplex Infra	294.00	324.00	10.20
Sensex	28343.00	28474.00	0.46
LTP: Last traded price on BSE at 10:06 am.