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Dilip Buildcon Share Price Surges After Settlement with NHAI

Written by: Team Angel OneUpdated on: Feb 17, 2025, 3:49 PM IST
Dilip Buildcon has reached a ₹176.90 crore settlement with NHAI, resolving disputes over project delays, cost escalations, and withheld payments.
Dilip Buildcon Share Price Surges After Settlement with NHAI
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Dilip Buildcon Ltd (DBL) saw its stock rise 4.40% to ₹410.10 at 11:27 AM,  February 17, 2025, following a settlement with the National Highways Authority of India (NHAI). The company’s shares had been under pressure in the past month, down 3.26%, and have fallen 17.16% over the past year.

Background of the Dispute

The dispute was related to an EPC contract for the six-laning of the Nidagatta-Mysore section of NH-275 in Karnataka, awarded under the Hybrid Annuity Model in 2018. DBL had claims against DBL Nidagatta – Mysore Highways Private Limited (DNMHPL), which were referred for conciliation. 

The case was reviewed by the Conciliation Committee of Independent Experts (CCIE), which led to a settlement between DBL, DNMHPL, and NHAI.

Settlement Terms

As per the agreement, NHAI will disburse ₹176.90 crore, with ₹117.41 crore directly related to DBL’s claims. The amount is expected to be paid within 30 days.

The settlement covers multiple claims, including:

  • Compensation for project delays due to issues with Right of Way (ROW).
  • Reimbursement of additional costs incurred during an extended construction period.
  • Compensation for Change-in-Law costs, such as Royalty and GST.
  • Release of withheld GST payments.
  • Revision of rates for Change of Scope (COS) work and payment adjustments.
  • Restoration of annuity and interest adjustments.
  • Compensation for price escalation in works between provisional and final completion.
  • Payment of additional interest accrued during the project.

Impact on the Company

The settlement resolves a long-pending issue and provides DBL with additional funds. While the stock saw a short-term jump, it remains lower than its level a year ago. The broader impact on the company’s financials will depend on how it manages future projects and cash flow.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

Published on: Feb 17, 2025, 3:49 PM IST

Team Angel One

Team Angel One is a group of experienced financial writers that deliver insightful articles on the stock market, IPO, economy, personal finance, commodities and related categories.

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