The announcement extended the company’s gains to a second straight session, after it broke a three-session losing streak on Tuesday.
The company received the Grant of Authorisation from the Petroleum and Natural Gas Regulatory Board (PNGRB) for laying, building, operating and expanding a Liquified Petroleum Gas (LPG) pipeline from Paradip, Odisha, to Raipur, Chhattisgarh, according to a regulatory filing on Wednesday.
The project is to be executed over three years and is valued at approximately ₹1,800 crore. PNGRB granted the company an exclusive licence to act as the authorised entity for developing, financing, constructing and operating the LPG pipeline infrastructure.
Once completed, the project will be executed via a special purpose vehicle (SPV), a wholly owned subsidiary of the company, with the core engineering, procurement and construction (EPC) work proposed to be awarded directly to Dilip Buildcon.
During the operating term, the project will generate revenue by collecting regulated transportation tariffs for LPG delivered up to designated delivery points. The pipeline will operate under PNGRB’s Common Carrier framework, allowing eligible Oil Marketing Companies (OMCs) and other users open access to pipeline capacity.
The company’s role through the SPV will be focused on infrastructure development and transportation services, keeping it isolated from commercial risks related to LPG procurement, trading, distribution or marketing. The project will facilitate direct LPG transportation to the bottling plants of various OMCs.
By creating a dedicated pipeline corridor, the project aims to replace current road-based LPG transportation that relies on fuel tankers. Removing heavy gas tankers from public transit routes is intended to substantially improve road safety, the filing said.
Shares of Dilip Buildcon had risen over 3.6% in intraday trade, before paring some gains to trade 1.52% higher as of 11.08am on Wednesday. The company’s shares have fallen more than 14% in the year-to-date period, declining a further 21% over the trailing 12-month period.
The stock had risen to its 52-week high of ₹538.20 on the same day last year and is currently trading at a discount of 32.2% to that price.