Ircon-SSNR JV Bags Rs 873 Crore Order For RVNL Rail Tunnel Project

Ircon International Ltd.'s joint venture with SSNR Projects Pvt. secured an order from Rail Vikas Nigam Ltd. for the construction of railway tunnels, according to an exchange filing from NSE.

The contract is for the broad consideration of Rs 873 crore and will be divided among Ircon and SSNR in a 70:30 ratio, mirroring the ownership percentages of both companies in the joint venture.

This would mean that Ircon's share is worth Rs 611.1 crore and SSNR's share is worth Rs 261.9 crore.

The project involves the construction of two railway tunnels in Madhya Pradesh.

The first tunnel will be built between kilometer marker 33.160 and kilometer marker 34.400, along a new railway line. And the second will be built between kilometer marker 57.400 and kilometer marker 66.040 along the same new railway line, according to the filing.

The tunnels will have a 'ballastless track' system. The project also includes 'approaches' leading up to the entrances of these tunnels.

This construction is part of a larger project to build a new electrified broad-gauge railway line connecting Mangliyagaon (Indore) to Budni stations. This new 198-kilometer railway line will pass through the Ratlam and Bhopal divisions of the Western and West Central Railways.

The project is expected to be completed in 46 months—40 months for the execution of the main project and six additional months for the defect liablility period.

Shares of Ircon International Ltd. rose as much as 2.51% during the day to Rs 163.80 apiece on the National Stock Exchange. It closed 2.07% lower at Rs 156.48 per share, compared to a 0.31% decline in the benchmark Nifty.

The share price has fallen 28.76% in the last 12 months and 27.22% for year-to-date.

One of three analysts tracking the company has a 'hold' rating, while two recommend a 'sell', according to Bloomberg. The stock's return potential implied a downside of 6.3%.