Welspun Enterprises gains on taking over Rs 1,900 cr HAM project in Kerala

Welspun Enterprises rose 1.44% to Rs 120.15 after the company agreed to take over a hybrid annuity mode project in Kerala from Calicut Expressway through the harmonious substitution process of the National Highways Authority of India.

The project entails six-laning of existing Kozhikode Bypass (Vengalam Jn. to Ramanattukara Jn.) of NH-66 in Kerala.

The proposal of harmonious substitution has been submitted by the existing concessionaire to the lenders of the project and the proposal is subject to NHAI approval. The appointed date for the project has been declared by NHAI. The original bid project cost of the project, of 28.4 kms length, is Rs 1,710 crore. The current estimated bid project cost with price index escalation is over Rs 1,900 crore, and the first-year operations and maintenance is Rs 6.30 crore. The project is proposed to be undertaken by a wholly-owned subsidiary of Welspun Enterprises.

With this addition, Welspun Enterprises has got 8 HAM projects worth approximately Rs 11,800 crore out of which 3 projects worth nearly Rs 3,400 crore have achieved COD/PCOD and others are in advanced stage of implementation. Additionally 1 BOT project of Rs 2,122 crore is also in advanced stage of implementation.

Further, Welspun has reached an agreement with Soma Indus Varanasi Aurangabad Tollway, a special purpose vehicle promoted by Indus Concessions India and Soma Enterprises, for six-laning of Varanasi Aurangabad NH2 project. The project length is around 192 km, and is situated in Uttar Pradesh and Bihar. The contract value for the company is estimated at Rs 2,366 crore.

Under the contract the company will undertake the procurement and construction, while the engineering will be undertaken by the SPV. The project construction is expected to start in April 2021 and likely to be completed in 24/27 months subject to the ongoing discussions between SPV and NHAI on descoping to non-availability of land.

This addition once operational shall make the outstanding EPC order book position as Rs 10,400 crore. This includes EPC work awarded by subsidiary/joint venture companies and the work being executed during Q4 FY21.

Welspun Enterprises part of the Welspun Group, is an operating company in the infrastructure business. Welspun Enterprises' consolidated net profit surged 39.6% to Rs 38.76 crore on a 16.1% fall in net sales to Rs 423.27 crore in Q3 FY21 over Q3 FY20.

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