Government approvals for metro and hydro projects worth Rs 53,000 crore are set to drive activity across power, engineering and construction companies. The Cabinet cleared three projects, including two hydroelectric plants in Arunachal Pradesh and Jaipur Metro Phase-2.
The approvals are expected to bring companies linked to hydroelectric development, engineering procurement and construction, and metro infrastructure into focus, as contracts and execution move forward.
Hydro Projects Cleared
The Cabinet approved the construction of the 1,720 MW Kamala Hydroelectric Project across Kamle, Kra Daadi and Kurung Kumey districts, with an allocation of Rs 26,070 crore. It also cleared the 1,200 MW Kalai-II Hydroelectric Project in Anjaw district, with an outlay of Rs 14,105.83 crore. Both projects are located in Arunachal Pradesh.
NHPC Ltd. is set to be tracked after it formed a joint venture with the Arunachal Pradesh government to implement the Kamala project. Its shares closed 1.36% higher at Rs 76.70, while the stock has declined 8.09% over the past 12 months.
The government will provide Rs 4,743.98 crore as budgetary support for the flood moderation component of the Kamala project. This is in addition to Rs 1,340 crore for enabling infrastructure, including roads, bridges and transmission systems, and Rs 750 crore as central financial assistance towards the state's equity share.
NTPC Ltd. will also be in focus as its arm THDC India Ltd. will implement the Kalai-II project through a joint venture with the Arunachal Pradesh government. THDC is not listed, but its parent NTPC is.
For the Kalai-II project, the government will provide Rs 599.88 crore for enabling infrastructure, along with Rs 750 crore as central financial assistance towards the state's equity share.
Shares of NTPC closed 1.44% higher at Rs 374.15, with 12-month returns of 5.68%.
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EPC And Equipment Companies
Engineering and construction companies linked to hydro projects are expected to see interest following the approvals.
Bharat Heavy Electricals Ltd. is typically involved in supplying turbines, generators and electro-mechanical packages for hydroelectric projects. Hindustan Construction Co. has experience in executing hydro projects in the Himalayan region and has worked on projects in Arunachal Pradesh. Patel Engineering also operates in hydro-civil construction, including projects in the North-East.
Jaipur Metro Phase 2
The Cabinet also cleared Jaipur Metro Phase-2, a north-south corridor from Prahladpura to Todi Mod. The project will have 36 stations and an outlay of Rs 13,038 crore.
Ceigall India Ltd. is expected to be tracked after disclosures showed that a joint venture between Ceigall India and SAM India emerged as the lowest bidder for a Rs 918 crore civil contract linked to Phase-2. The contract includes construction of an elevated viaduct and 10 stations, with completion scheduled in 34 months.
Shares of Ceigall India closed 3.56% higher at Rs 288.20. The stock has gained 15.07% over the past 12 months.
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