Multibagger Diamond Power hits 5% upper band for third day; here's why

Diamond Power share price: The multibagger stock rose to ₹387 on the National Stock Exchange (NSE), its 5 per cent upper price band and also an all-time high level.

Diamond Power Infra shares were locked in the upper price band for the third straight session on Tuesday, driven by multiple positive developments in the counter, the latest being an order win from the Adani group. 

 

The multibagger stock rose to ₹387 on the National Stock Exchange (NSE), its 5 per cent upper price band and also an all-time high level. It has risen 15 per cent in three sessions and remains in the green for the sixth month straight. As of 11.42 AM, nearly 1 million shares of the company had changed hands on BSE and NSE combined.

 

What's moving Diamond Power shares?

 

Today's rally in Diamond Power shares follows a Letter of Award (LoA) from Adani Electricity Mumbai for supplying medium-voltage and low-voltage underground power cables.

 

"The award is valued at ₹179.43 crore inclusive of GST and covers approximately 871 kms of cable in aggregate — 33 kV and 11 kV medium voltage cable together with associated 1.1 kV low voltage cable. The formal purchase order is to be issued by the customer against this Letter of Award," the company said in a press release.

 

This is the third consecutive year in which Diamond Power has been awarded this contract, reflecting Adani Electricity Mumbai Limited's assessment of the company's catenary continuous vulcanisation (CCV) manufacturing capability, its in-house testing infrastructure and its record of delivery performance on the Mumbai network. 

 

The company further added that this award adds to a book already weighted towards the specialised medium and extra high voltage products where technical qualification, rather than price alone, determines who is able to supply.

 

In another update, Diamond Power informed the exchanges during Friday's trading hours that it has completed its exit from the resolution framework of the Insolvency and Bankruptcy Code, 2016 (IBC), administered by the National Company Law Tribunal (NCLT) ahead of schedule. 

 

"The company has prepaid, in full, the entire ₹501 crore cash-plus 30-year bonds aggregating Rs ₹1,900 crore consideration payable to its erstwhile lenders under the NCLT-approved resolution plan. This amount was contractually payable over five years, with the final instalment due on 30 September 2027," according to the exchange filing. 

 

By discharging it one year in advance — and availing the pre-payment discounts extended by the lenders in the plan — every obligation of the promoters under the approved resolution plan stands fulfilled, thus leading to the company's exit from NCLT.

 

This development also makes the company eligible to obtain credit ratings from recognised rating agencies in the ordinary course mechanism.