HCC share price surges up to 11.6% on Monday, December 22; rights issue closes today

The company on Friday, in its regulatory filing, said that it has secured a significant infrastructure contract valued at approximately around ₹901 crore from the Northeast Frontier Railway (NFR) for the construction of New Tunnel 28 on the Tupul-Imphal New Broad Gauge (BG) railway line.

The project has been awarded to the HCC-VCCL Joint Venture (HCC-VCCL JV), in which HCC holds a 65% stake.

The contract entails the construction of a 3.5-kilometre main tunnel, along with comprehensive design, engineering, and commissioning services. The scope of work includes the design and proof-checking of a broad-gauge ballastless track, followed by the supply, installation, testing, and commissioning of all related systems and structures required for railway operations.

The project also covers the design, supply, erection, and commissioning of tunnel ventilation systems, as well as complete electro-mechanical works. In addition, the contract includes the construction of approach roads and other ancillary works necessary for integration with the surrounding infrastructure.

This important project forms part of the ongoing expansion and modernisation of India's railway network.

HCC Rights Issue details

According to news reports, HCC's ₹1,000 crore rights issue saw full subscription on Monday, the final day of bidding. The rights issue will close for subscription later this evening.

HCC had fixed December 5 as the record date for the rights issue.

A rights issue is a fundraising instrument for a company, where it issues shares at a discount to the current price to raise funds without increasing the debt burden.

ICRA's credit rating

In a separate filing, HCC said ICRA Limited has reaffirmed the long-term rating to [ICRA]BB(Stable) for Non-Convertible Debentures (NCDs) amounting to ₹823.90 crore.

ICRA BB (Stable) – Meaning

An ICRA BB rating indicates a moderate risk of default on financial obligations. Entities with this rating are considered to have inadequate safety and are more vulnerable to adverse business, financial, or economic conditions.

The “Stable” outlook means ICRA expects the company’s credit profile to remain unchanged in the near to medium term, with no immediate pressure for an upgrade or downgrade.

About HCC

Hindustan Construction Company Ltd is a major engineering and construction company with expertise in the infrastructure segment. The company is primarily engaged in high-value projects for transportation, power, marine, oil and gas pipeline construction, irrigation, water supply, utilities and urban infrastructure. Founded by Seth Walchand Hirachand in 1926, it is headquartered in Mumbai.

The company also undertakes various construction and engineering works for hydroelectric power projects and nuclear power projects. HCC has completed several projects pertaining to the construction of dams, barrages, tunnels and powerhouses.

The HCC constructed Maharashtra's first dam post-independence, the Vaitarna Dam, in 1954. It constructed the Sone Barrage, India’s first barrage in Bihar, in 1966, and also the world’s longest barrage, the Farakka Barrage in West Bengal, in 1971.