Infrastructure sector stocks, which have had a very swift climb in the past four weeks after a prolonged dull phase lasting a few quarters, on Monday dropped significantly.

On the day BJP’s Narendra Modi was sworn in as the Prime Minister of the NDA-led Government, the Sensex shot up by about 400 points to 25,085.89 (up 1.59 per cent), before ending flat at 24,716.88 on profit-booking. Infrastructure sector stocks surprisingly end lower.

L&T, Madhucon buck trend An analysis of various infrastructure stocks shows that majority of them registered falls ranging between 3-10 per cent, with only Larsen & Toubro, Gayatri Projects and Madhucon bucking the trend to close higher.

IVRCL closed at ₹26.10 (down 10 per cent), GVK Power and Infrastructure was down 9.44 per cent (₹17.94), GMR Infrastructure down 3.39 per cent (₹34.20), NCC down 4.53 per cent (₹76.90), Lanco Infratech down 10 per cent (₹13.45), Ramky Infrastructure down 4.95 per cent (₹76.85), IL&FS Engineering down 3.99 per cent (₹65), KNR Constructions down 3.43 per cent (₹133.80), Punj Lloyd down 6.19 per cent (₹40.95) and Gammon India down 4.9 per cent (₹31.05).

The infrastructure sector is beset with problems of delays in securing clearances for new projects, holding up their execution, and high interest rates. They have been pinning their hopes on a revival of the economy after the elections under the new Government. Interaction with some of the company executives reveals that they hope there will be a time-bound agenda to address their concerns.

In the weeks leading to the new Government led by Modi taking over charge, the Sensex has seen a sharp run-up on expectations of reform.

However, infra stocks had failed to gain in earlier rallies too. Several companies have knocked at the door of the Corporate Debt Restructuring cell seeking to reset their loan portfolio either at the holding company level or at the project level, all leading to subdued sentiment in the sector.

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