Indian Hume Pipe receives LoA from MP Jal Nigam

The Indian Hume Pipe company has received Letter of Acceptance (LoA) for the work of Rs 221.72 crore from Madhya Pradesh Jal Nigam for engineering, procurement, construction, testing, commissioning, trial run and operation and maintenance of various components of Indwar-I multi-village rural water supply scheme in Umaria district and Katni. The LoA envisages ultimate capacity of bringing 29.10 MLD treated water (23 hours of pumping) from the backwater of Bansagar dam on river Sone to 118 villages of Manpur block of Umaria and Vijayraghavgarh and Barhi blocks of Katni district in single package on a turnkey job basis, including trial run and maintenance of the entire scheme for 10 years. The project is to be completed within 24 months. The agreement will be signed in due course.
 
Indian Hume Pipes Company is a major player in the water infrastructure segment in India. It is engaged in the business of manufacturing, laying and joining of pipelines. It derives around 95 per cent of revenue from construction contracts of water supply schemes, pipe supply and the remaining revenue from other segment such as railway sleepers. 
 
The news came on the back of muted performance in last quarter, hence it can be a good boost for the stock. The stock reacted sharply after the news and jumped almost 3 per cent on 18 September 2018. The stock closed at Rs 278.05, hitting intra-day high of Rs 284.20.