Kalpataru Power dips 15% in 2 days after capex plan for office construction

The board has approved capital expenditure of approximately Rs 207 crore towards the purchase of land and will further incur approximately Rs 170 crore towards other expenses.

Shares of Kalpataru Power Transmission were under pressure for the second straight day on Thursday. The stock slipped 7 per cent to Rs 302 on the BSE in intra-day trade, thereby falling 15 per cent in two days after the company on Tuesday said its board approved capital expenditure (capex) for construction of corporate office of the company. The company is one of the largest specialized engineering, procurement, and construction (EPC) companies in India engaged in power transmission and distribution.

“The board of directors of the company has approved capital expenditure of approximately Rs 207 crore towards the purchase of land and will further incur approximately Rs 170 crore towards construction, municipal charges, taxes and for other approvals for development and construction of corporate office of about 1,79,000 square feet of leasable area near its existing office at Santacruz, Mumbai,” Kalpataru Power Transmission said in a regulatory filing.

The total cost per square feet would be in the range of approximately Rs 21,000. The company is expecting to complete the construction within a period of 24-30 months.

The company said the plan is aimed at meeting the long-term space requirement of the company to accommodate its growth plans and to consolidate businesses of the company and its subsidiaries' at a single location. The construction of a corporate office will help the company to reduce rental costs, bring better efficiency and synergy of working together at a single location, it said.

The company had appointed independent international real estate consultants, valuation agencies, and legal advisors to assist in the identification and evaluation of various options.

Last month, Adani Transmission (ATL) had acquired Alipurduar Transmission from Kalpataru Power Transmission for an enterprise value of Rs 1,300 crore.

At 11:05 am, the stock of Kalpataru Power Transmission was down 6 per cent, as compared to a 0.48 per cent decline in the S&P BSE Sensex. The trading volumes on the counter jumped over three-fold with a combined 740,000 equity shares changing hands on the NSE and BSE.