Reliance Infrastructure gains as arm wins Rs 2950 crore award against DMRC

The stock was up 4% at Rs 615 on BSE as compared to 0.06% rise in the S&P BSE Sensex at 9:18 am

Reliance Infrastructure opened 6.4% higher to Rs 630 on BSE after the company it has won Rs 2,950 crore arbitration award against Delhi Metro Rail Corporation (DMRC) for the alleged breach by the latter of the agreement on the Airport Express line.

“Delhi Airport Metro Express (DAMEPL), an associate of the company, has been awarded a compensation of Rs 2,950 crore, by a three member Arbitration Tribunal. The tribunal was constituted from a panel nominated by DMRC,” Reliance Infrastructure said in a press release.

“Reliance Infrastructure participated in the PPP (public-private partnership) model in the Metro sector to lead the Metro movement in the country through PPP but unfortunately had to terminate the agreement. We welcome the award and hope it will encourage the private sector to participate in the nation-building process,” it added.

Under the government-approved guidelines given by the NITI Aayog, public sector undertakings are expected to pay 75% of the award amount against a bank guarantee even if they want to challenge the award. Therefore, Reliance Infrastructure is expected to get Rs 2,210 crore if DMRC proposes to challenge the award, according to the statement.

At 9:18 am; the stock was up 4% at Rs 615 on BSE as compared to 0.06% rise in the S&P BSE Sensex. It is trading close to its 52-week high of Rs 635, touched on September 9, 2016 in intra-day trade. A combined 869,909 shares changed hands on the counter on BSE and NSE so far.