Welspun Enterprises darts up 3% on decision to not enter sustainable energy solutions

In the second quarter, the company posted a 48 percent decline in its consolidated net profit to Rs 69.01 crore dragged by increased expenses.

Welspun Enterprises Limited shares surged over 3 percent to Rs 332 in morning trade on November 28 as investors praised the company's decision to not pursue sustainable energy solutions citing its longer gestation and capital-intensive nature.

The board's decision gains significance as the company, in February, decided to explore businesses and approved the acquisition of Welspun New Energy Limited, a promoter group company, at a fair value
of Rs 1 lakh to acquire 100 percent equity share capital.

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"In view of this, the Board of Directors approved the transfer of its entire shareholding in Welspun New Energy Limited to the promoter group entities at a consideration of Rs 1 lakh", the company said in an exchange filing on November 27. "In addition to the share purchase consideration, the promoter group entities shall repay the entire amount of outstanding debt provided by the company to Welspun New Energy", the filing further added.

The company specialises in the development and operations of roads, highways, water, and wastewater projects across various Public-Private Partnership (PPP) models in rural and urban parts of the country. Welspun Enterprises has also invested in Oil and Gas exploration assets through a Joint Venture company, Adani Welspun Exploration Limited (AWEL).

In the second quarter, the company posted a 48 percent decline in its consolidated net profit to Rs 69.01 crore dragged by increased expenses.

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