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IRB Infra stock rises another 11 percent; NHAI to defer premium payment for some road developers

No Comments Sub Category:Infrastructure,Realty News Posted On: May 30, 2014

Continuing its steady gains of late, the stock of IRB Infrastructure Developers witnessed yet another increase – of 11 percent – on May 26. The last three weeks have marked a strong rally for the IRB Infrastructure stock, which has seen a surge of a whopping 83 percent since May 2.

Along with recording the latest 11 percent increase in its stock value, a new 52-week high was also touched by the stock of the infrastructure earlier in the day on May 26.

Meanwhile, in some other noteworthy infrastructure-related news this week, the road players welcomed the National Highways Authority of India (NHAI)’s recent move to give its approval for deferring the premium payment for some road developers. The move by the NHAI was announced late last week, after much dilly-dallying.

The NHAI’s decision to defer premium payments for some road developers underscores great relief for developers; especially since commercial flow of traffic has been affected in recent times because of slowdown; thereby resulting in a plunge in toll collections for all road players.

Since premium payments refer to the amount which is paid by the road developers to the government for the right to develop a particular stretch of road, maintain it, and collect tolls from traffic, the NHAI’s approval to defer the premiums will essentially free up cash for working capital and servicing debt — two areas with which most infrastructure companies are currently struggling.

Source: The Hindu Business Line

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