Noida Toll Bridge shares tank over 14% on bourses

Shares of Noida Toll Bridge Company Ltd (NTBCL) slumped over 14 per cent today amid indications that the firm would take longer time to recover cost incurred in building the Noida Toll Bridge project.
NTBCL operates the DND Flyway between Delhi and Noida.
The stock nosedived 14.22 per cent to settle at Rs 27.45 on the BSE. During the day, it plunged 16.56 per cent to Rs 26.70 -- its 52-week low.
At the NSE, shares of the company tanked 14.1 per cent to Rs 27.40.
In terms of volume, 7 lakh shares of the company changed hands at the BSE and over 34 lakh shares were traded at the NSE during the day.

On Thursday, NTBCL's board decided to seek shareholders' approval for collecting toll from the users of the project till March 2031. Such a move implies that the firm might take longer than expected to recover costs related to the project.

Noida Toll Bridge Company yesterday informed BSE that the concession agreement governing the Noida Toll Bridge project was executed on November 12, 1997 between New Okhla Industrial Development Authority (NOIDA), Infrastructure Leasing & Financial Services and the company.
The Noida Toll Bridge, a special purpose company, is the first green-field private toll bridge and road network project implemented in the country, formed for this purpose.

With no precedence, the concession agreement was drafted on a fixed return, variable period format, the filing said.
The privatisation of the road sector, however, has matured considerably since the execution of Noida Toll Bridge Concession.
The concession agreements executed for developing infrastructure projects like roads, bridges, tunnel by the authorities since the past several years have a fixed tenure ranging from 18 to 30 years depending on the size, geography, investment and the nature of the projects with no guaranteed returns on project cost.
"Accordingly, the board of directors of the company at their meeting held on July 9, 2015 considered and approved a draft proposal which includes modifications to clauses in the concession agreement dated November 12, 1997, pertaining to a fixed period concession, including bringing an end to the concession period on March 31, 2031," it said.

The proposal, after concurrence of NOIDA, will be presented to the shareholders for approval, the filing added.