Sadbhav Engineering –Neutral- Angel Securities
A Sadbhav Engineering (SEL)-led consortium has secured a road BOT project costing Rs1,225 crore (the other partner being MCL, 77:23 JV). The road project is for the 4-laning of the Bijapur – Hungund section of NH-13 in the State of Karnataka, and is to be executed on a design, build, finance, operate and transfer (DBFOT) basis.
The concession period for the project is of 20 years, inclusive of a construction period of 910 days. Our talks with the management indicate that this road BOT project would have a positive grant component to the tune of Rs274 crore, the rest being funded proportionately with a debt to equity ratio of 90:10.
We believe that the current valuations discount most of the positives; hence, we maintain our NEUTRAL view on the Stock.
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