GVK Power spikes 5% on JP Morgan upgrade report

GVK Power and Infrastructure surged more than 5 percent intraday on Wednesday after the foreign research firm JP Morgan has upgraded the stock to overweight with a target price of Rs 19.

"GVK has informed NHAI of its intention to exit Shivpuri-Dewas road project. If the project is excluded, the medium-term equity funding gap for the company eases to Rs 400 crore, which is a positive," JP Morgan explained the reason while giving upgrade rating for the stock. After the GVK group threatened to quit the Shivpuri-Dewas project, National Highways Authority of India has said that it has filed a petition in the Delhi High Court against the company for not allowing it to encash the performance guarantee of nearly Rs 100 crore. GVK Shivpuri Dewas Expressway Private Limited, a step down subsidiary of the Company, had signed a concession agreement on January 12, 2012 with National Highways Authority of India (NHAI) for four laning of Shivpuri Dewas section of national highway No 3 (from Km 236 to Km 566.450) for a length of 332.46 kms in the State of Madhya Pradesh to be executed as BOT (Toll) project on DBFOT Pattern under National Highways Development Programme (NHDP) phase lV. The concession period for the project is for 30 years including construction period of 30 months. At 11:09 hours IST, the stock rose 4.88 percent to Rs 15.04 amid large volumes on Bombay Stock Exchange. Trading volumes increased 99 percent to 26,40,440 equity shares as compared to its five day average of 13,28,336 shares. Market capitalisation of the company currently stands at Rs 2,375.13 crore. Also Read
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