Ashoka Buildcon to acquire 50% stake in GVR Ashoka Chennai for ₹185 crore, shares up 7%

Shares of Ashoka Buildcon, India's leading highway developer, rallied more than 7% to touch the day's high of ₹156.75 apiece on NSE on Thursday after the company announced acquiring a 50% stake in GVR Ashoka Chennai ORR for ₹185 crore.

Ashoka Buildcon signed a share purchase agreement with GVR Infra Projects Ltd (GIPL) and GVR Ashoka Chennai ORR Limited (CORR) to buy 9.45 crore shares held by GIPL in CORR.

"Ashoka Buildcon Limited has entered into a share purchase agreement (SPA) with GVR Infra Projects Limited and GVR Ashoka Chennai ORR Limited (CORR) for the acquisition of 9,45,00,000 equity shares held by GIPL in CORR, constituting 50% of the share capital of CORR, for a consideration of ₹185,00,00,000 subject to terms as agreed under the Share Purchase Agreement (SPA) as per the terms of the SPA,” Ashoka Buildcon said in an exchange filing.

After the acquisition of 50% of the shares held by GIPL, CORR will be a wholly-owned subsidiary of Ashoka Buildcon with effect from the date of the acquisition of all 9.45 crore equity shares, it further said.

The completion of the above transaction is subject to the completion of certain conditions precedent, the filing said. Approvals from the lenders of CORR and the Government of Tamil Nadu, as well as the authority awarding the project, namely the Tamil Nadu Road Development Corporation Limited, have already been obtained, the company informed the stock exchanges.

The filing also said that the company has entered into a SPA with GVR Infra Projects, a member of the joint venture, for the acquisition of an additional 50% stake in CORR.

"It is not a related party transaction since GIPL is not a related party to the company. The transaction is a commercial transaction with GIPL," the company said.

At 14:23 pm, shares of Ashoka Buildcon were trading at ₹157.05 apiece, up 7.7% on NSE.