Olectra Greentech Limited awards order to Megha Engineering and Infrastructures Ltd

The board of directors of Olectra Greentech Limited, subject to the approval of the shareholders of the Company, accorded its approval to award the contract for construction of the greenfield electric vehicle manufacturing facility on 150 Acres of land situated at Seetharampur, Hyderabad, Telangana ("Greenfield EV Manufacturing Facility" or "Project") to Megha Engineering & Infrastructures Limited (MEIL) which is the ultimate holding company.

As the construction of the Greenfield EV Manufacturing Facility will require the deployment of significant funds by the Company, the Board in its meeting held on 29.03.2023, decided to float a public tender for identifying a suitable vendor having multi-faceted experience pertaining to excavations, geological understandings and experience in manufacturing facility construction, having all the required skillsets and experience in the relevant domains, and who would be able to provide end to end solutions under one roof while being cost effective (such public tender, the "Tender").

Pursuant to the Tender, two bidders participated, viz. Suroj Buildcon Private Limited ("SBPL") and Megha Engineering & Infrastructures Limited ("MEIL", and together with SBPL, the "Bidders"). It was found that the price quoted by MEIL was lower in comparison with the price quoted by the other bidder (SBPL) and was also less than the Company's estimated cost for the Project.

The difference between the price quoted by MEIL and SBPL is approximately Rs. 190.48 Crores which is equivalent to 46. 94% of the Company's estimated cost for the Project. Based on the above evaluation and considering that the pricing is on an arms' length basis on account of selection of vendors by a public tender, the Audit Committee and Board of Directors of the Company in their meeting held on 19th June, 2023, evaluated all possible options available and after comparing quotes from the Bidders participated in the Tender, subject to shareholders' approval, has approved the engagement of MEIL for the establishment of the Greenfield EV Manufacturing Facility, due to its impressive track record in EPC Contracts and various construction activities and having required skill sets and experiences in the relevant domains, to undertake the construction of the Greenfield EV Manufacturing Facility at competent price.

Shares of Olectra Greentech Limited was last trading in BSE at Rs. 963.65 as compared to the previous close of Rs. 926.05. The total number of shares traded during the day was 121622 in over 5354 trades.

The stock hit an intraday high of Rs. 974.75 and intraday low of 926.55. The net turnover during the day was Rs. 115325679.00.

Source : Equity Bulls

Keywords

OlectraGreentech INE260D01016 Contract GreenfieldElectricVehicleManufacturingFacility MEIL