Ashoka Buildcon to monetise its real estate portfolio in Pune

Ashoka Buildcon Ltd is a construction and infrastructure company that has strengthened its market position by using both EPC and BOT models. Recently, the company was the lowest bidder for two major infrastructure projects in the Mumbai area, with a combined estimate of Rs. 1,280.8 crore. These projects involve the design and construction of two bridges: one from Gaimukh to Payegaon, valued at Rs. 991.2 crore, and another from Kolshet to Kalher, valued at Rs. 289.6 crore.  The bridge project from Kolshet to Kalher Creek is estimated to cost Rs. 289.6 crore and take 42 months to complete. In the meantime, it is anticipated that the Rs. 991.2 crore Gaimukh to Payegaon Creek bridge project will be finished in 36 months.

Ashoka Buildcon property handover to VHL for Rs. 453 crore:

The company said in a stock exchange filing, “This is to inform that Ashoka Buildcon Limited has been apprised by Viva Highways Limited (VHL), a wholly owned subsidiary, that the land owned by it under its Real Estate Portfolio, situated at Hinjewadi, Pune, has been monetized at a total consideration of Rs. 453 crore.”

As per the latest developments, on August 31, ICRA Ltd. withdrew the credit rating given to Ashoka Buildcon’s unlisted key subsidiary, Ashoka Concessions Ltd. The reason for the retraction was that ACL had no outstanding debt or bank credit facilities. Furthermore, on September 2, Ashoka Buildcon’s Commercial Papers, with a combined issue size of Rs 50 crore, were listed on the BSE. Approved by the board on May 22, this issuance has an 8.35% interest rate and is scheduled to mature on November 26.

Ashoka Buildcon Limited receives financial support:

Ashoka Buildcon’s finances have been considerably strengthened by the land monetisation, which highlights the company’s effective use of its real estate assets. In addition to strengthening Ashoka Buildcon’s financial position, the sizeable sum of Rs. 453 crore increases its liquidity and opens the door for potential future investments in crucial infrastructure projects.

The timetable for monetizing Viva Highways’ land coincides with Ashoka Buildcon’s recent success in being the lowest bidder on two major projects for the Mumbai Metropolitan Region Development Authority (MMRDA). These projects add significantly to the company’s sizable portfolio of ongoing infrastructure developments, valued at Rs. 1,280.8 crore.

Ashoka Buildcon Limited stock jumps 2% today:

Ashoka Buildcon Limited’s stock price is currently trading at Rs. 271.43 per share, up nearly 2% in the intraday segment. The stock hit a 52-week high of Rs. 284.74 per share today.

Conclusion: Following the sale of the right to VHL for Rs. 453 crore, Ashoka Buildcon Limited now has cash flow.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.