Ashoka Buildcon acquires additional stake worth ₹1,526 Crore in subsidiary

4 Nov 2024 , 09:23 AM

Ashoka Buildcon’s stock rose after it announced acquiring 34% interest in Ashoka Concessions Ltd (ACL) for ₹1,526 Crore. The acquisition, which makes ACL a wholly-owned subsidiary, represents a strategic consolidation of Ashoka Buildcon’s road and highway project portfolio.

By mid-day, Ashoka Buildcon shares were trading up 3% at ₹240, marking the fourth straight session of gains and increasing its year-to-date growth to an astonishing 75%, far surpassing the Nifty 50’s 11% gain during the same period. The October bounce, which has seen shares increase about 5%, follows falls in August and September.

At around closing, Ashoka Buildcon was trading 2.31% higher at Rs 238.60, against the previous close of Rs 233.21 on NSE.

This acquisition provides an exit strategy for current investors, including Macquarie SBI Infrastructure Investments and SBI Macquarie Infrastructure Trust. Ashoka Buildcon now strengthens its presence in ACL, which supervises many Build-Operate-Transfer (BOT) and annuity highway projects.

Ashoka Buildcon’s subsidiary, Viva Highways, would buy a 26% ownership position in Jaora Nayagaon Toll Road Company for ₹150 Crore. These deals, reflected in agreements dated October 30, are awaiting regulatory approval from lenders, the National Highways Authority of India (NHAI), the Madhya Pradesh Road Development Corporation (MPRDC), and the Competition Commission of India.

Ashoka Buildcon’s recent financial performance has been impressive, with Q1 FY25 standalone net profit jumping 148% year-on-year to ₹40.8 Crore, and a 22% rise in total income to ₹1,900.8 Crore.

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