PNC Infratech to sell 12 road assets to Highway Infrastructure; stock hits 52-week high

PNC Infratech shares extended their gains for the sixth session in a row on Tuesday (January 16) and clocked a 52-week high of Rs 420.85 apiece on the BSE. Dalal Street participants gave a thumbs up to the company's move to sell 11 hybrid annuity road assets and one toll road asset to Highway Infrastructure Trust.

At around 10:24 a.m., shares of PNC Infratech traded 2.26 per cent or Rs 8.75, higher on the BSE at Rs 396.25 apiece. The market capitalisation of the company stood at Rs 10,165.36 crore at around the same time.

PNC Infratech and its subsidiary PNC Infra Holdings have executed definitive agreements with Highways Infrastructure Trust to divest 12 of the company’s road assets. Among the 12 road assets, 11 are National Highway (NH) Hybrid Annuity Mode (HAM) assets, and one is a State Highway BOT Toll asset.

The assets highways are approximately 3,800 lane km in the states of Uttar Pradesh, Madhya Pradesh, Karnataka, and Rajasthan. The enterprise value of the transaction is Rs 9,005.7 crore and is subject to any adjustments as stipulated in the definitive agreements, translating to an equity value of Rs 2,902 crore (including cash) on invested equity of Rs 1,740 crore.

As per Zee Business research, the company's order book was worth Rs 17,800 crore by September 30, 2023. The company earns 70 per cent of its income from road projects, 20 per cent from tolls, and 10 per cent from water. The company's borrowings are Rs 7,000 crore.

Zee Business Managing Editor Anil Singhvi recommended buying shares of PNC Infratech for three targets of Rs 394, Rs 400, and Rs 405 apiece, keeping the stop loss at Rs 378 apiece.

PNC Infratech share price: Past performance 

In a year, PNC Infratech shares have gained over 20 per cent as against the Nifty 50's rise of over 23 per cent.

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