Low PE, High ROCE Infrastructure Stock Bags Gems & Jewellery Park Project In Chhattisgarh; Shares Jump Over 8%
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Ashoka Buildcon has received an LOA from CSIDC to develop a Gems & Jewellery Park in Raipur under the PPP model, with an accepted project premium of Rs 112.40 crore.
✨ Key Takeaways
Indian equity benchmarks traded higher during Monday's session, with the benchmark Nifty 50 index gaining 211.30 points, or 0.89 per cent, to 23,834.20. Amid the broader market strength, Ashoka Buildcon's share price jumped 7.19 per cent to Rs 131.91, following the company's announcement of a new infrastructure project in Chhattisgarh.
Ashoka Buildcon Receives LOA For Gems & Jewellery Park
Ashoka Buildcon Limited informed stock exchanges that it has received a Letter of Acceptance (LOA) from the Chhattisgarh State Industrial Development Corporation Limited (CSIDC) for the development of a Gems & Jewellery Park in Raipur, Chhattisgarh.
The project will be developed under the Public Private Partnership (PPP) model and involves the development of a sector-specific industrial park spread across 38,922 square metres of land in Raipur.
Project Premium Fixed At Rs 112.40 Crore
Under the terms of the award, the accepted premium for the project stands at Rs 112.40 crore. In addition, lease rent has been fixed at 2 per cent of the premium amount, with an escalation of 10 per cent every fourth year.
The project has been awarded with a 30-year lease period, which can be extended up to 90 years, providing long-term development rights and operational visibility. The construction period for the project has been fixed at five years.
Joint Venture Project
Ashoka Buildcon had submitted the bid through a joint venture, where the company is the lead partner with a 51 per cent stake. The project has been awarded by a domestic entity and forms part of the state's efforts to promote specialised industrial infrastructure and manufacturing ecosystems.
The company clarified that neither its promoters nor promoter group entities have any interest in the awarding authority and that the contract does not fall under related-party transactions.
Strengthens Industrial Infrastructure Portfolio
The award further strengthens Ashoka Buildcon's presence in infrastructure development projects beyond its traditional focus on roads, highways and EPC contracts.
The Gems & Jewellery Park is expected to support the growth of jewellery manufacturing, processing and allied industries in the region while contributing to industrial development and employment generation in Chhattisgarh.
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About Ashoka Buildcon
Ashoka Buildcon Ltd is one of India's leading infrastructure development companies with operations spanning highways, bridges, power transmission and distribution, railways, buildings, smart cities and industrial infrastructure projects. From a valuation perspective, Ashoka Buildcon trades at a low P/E of 4.67 while maintaining a healthy ROCE of 26.5 per cent
The company executes projects through EPC, BOT, HAM and PPP models and has developed a diversified portfolio across transportation, urban and industrial infrastructure segments. Over the years, Ashoka Buildcon has established a strong presence in large-scale infrastructure development projects across India.
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Disclaimer: This article is for informational purposes only and does not constitute investment advice.