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Welspun Enterprises jumps after subsidiary signs concession agreement with NHAI for road project

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Welspun Enterprises jumped 6.62% to Rs 49.10 at 14:30 IST on BSE after the company's wholly-owned subsidiary signed concession agreement with NHAI for the road project of Delhi Meerut Expressway.

The announcement was made on Saturday, 5 March 2016.

Meanwhile, the S&P BSE Sensex was down 109.80 points or 0.38% at 24,557.33.

On BSE, so far 35,710 shares were traded in the counter as against average daily volume of 34,551 shares in the past one quarter. The stock hit a high of Rs 52.15 and a low of Rs 48.65 so far during the day. The stock had hit a 52-week high of Rs 79.10 on 5 August 2015. The stock had hit a 52-week low of Rs 28.25 on 21 March 2015. The stock had underperformed the market over the past one month till 4 March 2016, sliding 5.64% compared with Sensex's 1.27% gain. The scrip had also underperformed the market in past one quarter, dropping 12.29% as against Sensex's 3.87% fall.

The small-cap company has equity capital of Rs 174.04 crore. Face value per share is Rs 10.

Welspun Enterprises said that National Highways Authority of India (NHAI) and company's wholly-owned subsidiary, Welspun Delhi Meerut Expressway (WDMEPL) have entered into the concession agreement on 4 March 2016, for development of 8.716 kilometers of the existing road of Delhi-Meerut Expressway by six laning and four laning of either side of the expressway on design, build, operate and transfer basis.

Under the concession agreement, WDMEPL will develop package I, 8.716 kilometers of the Delhi-Meerut Expressway at a bid project cost of Rs 841.50 crore, and operate it for a period of 15 years. During construction, 40% of the bid project cost will be funded by NHAI, with the balance 60% to be arranged by WDMEPL. During operation period, NHAI will pay WDMEPL this 60% in semi-annual payments, along with interest thereon. NHAI will also pay WDMEPL annualised operations and maintainence cost of Rs 3.95 crore (adjusted for inflation) for the maintainence of the project road during this period. Construction of the project is to be completed in 2.5 years after appointed date. The project is to be maintained for 15 years after construction, after which it will be transferred to NHAI.

Welspun Enterprises' net profit jumped 3910.9% to Rs 25.67 crore on 154.8% rise in net sales to Rs 61.62 crore in Q3 December 2015 over Q3 December 2014.

Welspun Enterprises' (WEL) key activity is in the infrastructure business. The company operates projects on public private partnership (PPP) basis in various sectors like roads, water, and urban infrastructure.

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First Published: Tue, March 08 2016. 14:26 IST