The shares of this leading highway developer gained 7 percent to ₹155.60 per share on Thursday after the company entered into a share purchase agreement to acquire a 50 percent stake in GVR Ashoka Chennai ORR Limited.
At 11:40 a.m., Ashoka Buildcon Ltd. shares were trading at ₹155.05 a share, a 6.53 percent increase over the previous close price. The company has a market capitalization of ₹4,346 crore on the stock exchange.
Ashoka Buildcon Limited entered into a share purchase agreement (“SPA”) with GVR Infra Projects Limited (“GIPL”) and GVR Ashoka Chennai ORR Limited (“CORR”) for the acquisition of 9,45,00,000 equity shares held by GIPL in CORR, comprising 50% of the share capital of CORR, for a consideration of ₹ 185 crores.
Post-acquisition of 50% equity shares held by GIPL, CORR would become a wholly-owned subsidiary of Ashoka Buildcon Limited with effect from the date of acquisition of all 9,45,00,000 equity shares. Company reported in its exchange filing.
CORR had a total income of ₹ 184.83 crore and a net worth of ₹397.55 crore based on the audited financial statements of FY 2023. The CORR is a pioneering infrastructure development company in the road and power sectors.
Ashoka Buildcon Ltd. is engaged in the business of construction and infrastructure facilities on an EPC and BOT basis. It is also involved in the sale of RMC (ready-mix concrete).
The firm has witnessed a 36 percent annual growth in revenue, climbing from ₹1,956 crore in Q3FY23 to ₹2,657 crore in Q3FY24. Conversely, the net profit has seen a 20 percent decrease, dropping from ₹138 crore to ₹110 crore.
As of the December quarter of 2024, the company’s total order book stands at ₹13,167 crores. The primary source of revenue is from the state government, accounting for 43.4%, followed by 29.1% from the central government, with private clients contributing 8%.
Segment-wise revenue breakdown reveals that the majority, 42.3%, comes from power transmission and distribution projects, followed by 34% from road EPC, and 9% from road HAM projects.
In February 2024, Ashoka Buildcon Limited, along with an investment fund managed by Morgan Stanley India Infrastructure (MSII), sold their entire stake in Unison Enviro Private Limited, a subsidiary of the company, to Mahanagar Gas Limited (“MGL”). The equity consideration for the deal was ₹ .562.09 crore, with the company receiving ₹ 286.67 crore for its 51% stake.
In February 2024, the company was granted the Letter of Award by the National Highways Authority of India for the project involving the expansion of Aurangabad to Bihar-Jharkhand Border (Chordaha) section of NH-2 (PKG-1) in Bihar, under the Bharatmala initiative, to be executed on an Engineering, Procurement, and Construction (EPC) basis, with a total contract value of ₹. 520 crore.
Ashoka Buildcon Ltd shares have gained 44 percent in the last six months and 92 percent in a year.
Written by Omkar Chitnis
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