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The share price of infrastructure major Hindustan Construction Company (HCC) rose 3.8 per cent on Wednesday after the company announced that its joint venture with Hyundai Development Corporation (HDC) has bagged the contract for Package II of Mumbai coastal road worth ₹2,126 crore from the Municipal Corporation of Greater Mumbai (MCGM).
HCC’s share in the JV is 55 per cent which translates into an order inflow of ₹1,169 crore for the company. The project is to be completed in four years, the company said.
As BusinessLine had reported earlier this year, HCC’s joint venture had emerged as the front-runner in the tender for this package of Coastal road project.
Technically challenging
“For HCC, this prestigious and technically challenging project is a matter of immense pride and a natural extension of the Bandra Worli Sea Link constructed by it,” Arjun Dhawan, Director & Group Chief Executive Officer, said.
MCGM’s Mumbai Coastal Road Project (MCRP) — the cost of which is estimated at ₹15,000 crore — aims to decongest traffic in the city by connecting Marine Drive in the south to Kandivili in the north.
The road comprises tunnels, roads on reclaimed land, roads on stilts and bridges with interchanges planned at strategic locations for dispersal of traffic.
Larsen and Toubro (L&T) is another player who bagged two packages (Package I and IV) of this project, the company announced on Monday.
Another part of the project, a 17-km-long sea link from Bandra to Versova which is developed separately by the Maharashtra State Road Development Corporation, has been recently awarded to Reliance Infrastructure that bid ₹7,000 crore.
Ray of hope for HCC
HCC’s order book stood at ₹18,714 crore as of June 30, 2018. The company has been facing headwinds after it plunged into loss in the first quarter of FY19 due to lower claims recognition.
On top of that, the company’s subsidiary Lavasa Corporation was admitted for insolvency proceedings by the Mumbai-bench of National Company Law Tribunal (NCLT).
Lavasa is jointly held by HCC (68.7 per cent), Avantha Group (17.18 per cent), Venkateshwara Hatcheries (7.81 per cent) and Vithal Maniar (6.29 per cent).
Last month, the company announced selling off its entire stake in Farakka-Raiganj Highways project to Singapore-based Cube Highways for ₹372 crore.
Another ₹500 crore will be raised via rights issue route approved by the company’s board in its meeting on September 5.
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