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Entry Price

277.00

Target

325.00

Recommend Date

10-01-2020

Return

17.33 %
BUY

Date : 10-01-2020

In line with its strategy of monetizing BOT assets, KNR Construction’s (KNR) has entered into a share purchase agreement (SPA) with Cube Highways to sell its 100% entire equity stake in Walayar BOT project at an enterprise value of | 529.3 crore. This implies equity value of | 386.2 crore and P/BV multiple of 0.97x. The proceeds from the deal could be utilized towards retiring debt and as a growth capital. Also, this could lead to KNR becoming a net cash positive entity. We like the company given its focus on EPC business, best in class WC and healthy balance sheet position. KNR remains our top pick in the sector.