Power Mech Projects soars 15% on order win from Central Coalfield

The projects has been given by a subsidiary of Coal India, aggregating to Rs 9,294 crore over the contract period

Shares of Power Mech Projects soared 15 per cent to hit a fresh 52-week high of Rs 767.30 on the BSE in intra-day trade on Monday after the company said it has won a mine development & operation (MOO) project from Central Coalfields Limited (CCL),a subsidiary of Coal India, aggregating to Rs 9,294 crore over the contract period. The stock surpassed its previous high of Rs 744.90 on June 17, 2021.

Power Mech Projects is one of the leading industrial services and construction companies providing versatile and comprehensive services in power and infrastructure sectors.

The MOO contract will primarily comprise of mine infrastructure development, removal of overburden and extraction of coking coal, processing, crushing and transportation of coal up to washery of CCL, carrying out R&R activities and any other activities incidental to mining as per the project document at Kotre Basantpur Pachmo OCP located in Ramgarh and Bokaro Districts, Jharkhand.

"The project has total coal extraction capacity of approximately 105 million MT with an annual capacity of 5 million MT and over burden removal during the project period is over 539 MBCM. The concession period is 25 years including two years of development period with an option of extending the contract for a period of another 10 years with the consent of both the parties (with this the total contract period will extend up to 35 years)," the company said in a press release.

The project has been awarded to a consortium of Power Mech Projects and AMR India wherein Power Mech is the consortium leader with 74 per cent equity stake and AMR India will hold 26 per cent stake.

A Special Purpose Vehicle (SPV) - KBP Mining Private Limited - has been formed to undertake the project. AMR India Limited, a two decade sold Company, has also been engaged in contract mining involving operations like removal of overburden, mining of coal/lignite, logistics etc. The SPV will have material handling expertise of Power Mech in Project Development and the technical expertise of AMR India in the field of greenfield mining project development.

This project, Power Mech Projects' management said, will strengthen the already robust order book even further and enable the Company to diversify its order book which is in line with its strategy to have an optimum mix between power and non-power segments. Once operational, the project will add more than Rs 400 crore annually to top line.

At 12:43 pm, the stock was up 9 per cent at Rs 726 on the BSE, as compared to a 0.22 per cent rise in the S&P BSE Sensex. Trading volumes on the counter more than doubled with a combined 556,000 shares changing hands on the NSE and BSE till the time of writing of this report.