Shares of GVK Power & Infrastructure rallied by 5% to Rs 22.1 on this morning, and were locked at the upper circuit for the second consecutive trading session, after the company signed a concession agreement for the mega Rs 16,000 crore Navi Mumbai Airport project on Monday. “ ..Announced signing of the concession agreement for the Navi Mumbai International Airport project, through the creation of special purpose vehicle – Navi Mumbai International Airport Pvt Ltd (NMIAL) with CIDCO,” GVK said in a regulatory filing.
Interestingly, ace investor Porinju Veliyath is bullish on the shares in the current year 2018. In a recent interview with ET Now, the Kochi-based investor said, “We are making a bet on GVK because some of the infrastructure companies may not have that much clean and healthy balance sheets today but if they have good execution capabilities, India is offering them great opportunities going forward. It is better than what we had at the best of times in the past, maybe 10 years ago.”
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Interestingly, the ace investor has been bullish on GVK Power & Infrastructure for quite some time now. Sharing that he owns 6.5% stake in the company, Porinju Veliyath quipped in November-17, “Last time when I went to Mumbai I was waiting for the flight in the lobby. I was telling my wife I own 3% of Mumbai Airport! So something nice to think about. There are leveraged infra companies and with the less leverage infra companies, infrastructure is definitely a theme and a story going forward.”
CIDCO is the nodal authority of the Government of Maharashtra for implementation of this project. GVK through its subsidiary Mumbai International Airport holds 74 percent equity shares of NMIAL while CIDCO holds the balance 26 percent. GVK subsidiary MIAL was declared successful bidder for Navi Mumbai International Airport in February 2017 and received the Letter of Award from Cidco on October 25, 2017.
Advising investors in how to pick the right shares, Porinju Veliyath told ET Now, “If you identify a bad company which may or may not survive with too much strained balance sheet, you can ignore them. Do not go for every company with a strained balance-sheet. You have to use a lot of common sense and wisdom in selecting these companies which is applicable to every industry but coming to infrastructure, it is a very challenging kind of space. You have to be extra smart to pick a winner in that space.”