Farakka-Raiganj Highways deal may boost HCC

The stock of HCC may remain focus, as it closes sale of Farakka-Raiganj Highways to Cube Highways for an enterprise value of Rs 1,508 crore.

HCC Concessions Ltd, the infrastructure development arm of HCC Group, completed its 100 per cent sale of Farakka-Raiganj Highways Ltd to Cube Highways and Infrastructure II Pte Ltd. FRHL, which forms part of the main arterial highway in West Bengal, is among the largest Public Private Partnership (PPP) projects in India, with an enterprise valuation of Rs 1,508 crore, comprising debt of Rs 905 crore and an equity valuation of Rs 603 crore.

Cube Highways is a platform controlled by I Squared Capital, Abu Dhabi Investment Authority and IFC.

The total expected pay-out of Rs.603 crore to HCC group includes cash pay-out of Rs 270 crore , which combines equity consideration and contractor payments; Rs 233 crore of hold backs to be released on the completion of dispute resolution with NHAI; and up to Rs 100 crore of earnout is payable in 2023 contingent on traffic projections (the traffic in FRHL has already returned to pre-COVID levels).

Additionally, as part of the agreement with Cube, HCC Group will be entitled to a revenue share from FRHL over the entire concession period, which could be material in nature, and the details of which will be specified on completion of the ongoing conciliations with NHAI.

Central Bank QIP in focus

The floor price for Central Bank of India's share sale through a qualified institutional placement, which opened on Tuesday, has been set at Rs 16.18 apiece. The Bank board will meet on Friday to consider and approve the issue price for equity shares to be allotted to qualified institutional buyers, it said in a notice to the stock exchanges.

Earlier, the State-owned Central Bank of India said it will raise up to Rs 5,000 crore of equity capital through various modes, including follow on public offer, rights issue or QIPs, to maintain its capital adequacy ratio.

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