The shares of GVK Power & Infrastructure Ltd closed 6.73 per cent on Wednesday at Rs 15.32 on the BSE. Intra-day it gained by about 10 per cent but subsequently pared some gains.
The market seems to be reacting positively to the Hyderabad-based diversified infrastructure company’s move to reconsider the Rs 3,200 crore Shivpuri-Dewas National Highway Project in Madhya Pradesh.
If the company does go ahead with the move to back off the project, due to delays in securing clearances and hurdles in implementation, it will be able to bring down its equity and concurrent debt.
Already, the GVK Group and National Highways Authority of India have got into a situation where they do not agree with the contention each other over the reason for delay. The Hyderabad-based GVK group has sought to highlight the difficulties in implementing the project beyond their control and due to delays from NHAI. NHAI may consider action against the company.
Recently, GMR Infra decided to terminate the contract with NHAI on a major expressway project citing difficulties in execution due to delay in securing mandatory clearances and hurdles in implementation.