Welspun Enterprises: This infra firm won two major projects and the stock is available at a discount

Kolkata: Mumbai-based Welspun Enterprises is a player in the road and water sector. It has secured a couple of high-value contracts, the combined value of which is Rs 10,445 crore. Needless to say, it could bode well for the investors of the infrastructure company. It will also raise Rs 1,000 crore through the issue of preference shares.

The Welspun Enterprises stock surged in excess of 9% on October 15 after its board decided to raise Rs 1,000 crore through preferred warrants. However, the news was a bit sullied by the decline of revenue and profit figures for the Q1 period (April-June) of the current financial year.

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The shares of Welspun Enterprises touched an intraday high of Rs 578.30. However, the shares are trading at a significant discount to the 52-week high level of Rs 655. On Thursday, October 16, a little after midday, the Welspun Enterprises stock was trading at Rs 546.40, down Rs 16.45 or 2.92%.

Welspun Enterprises has decided to raise Rs 1,000 crore through an issue of 1,90,47,619 warrants. According to the plan, one warrant will represent an equity share which has a face value of 10 and an issue price of Rs 525. The company will adopt a route of private placement. An extraordinary general meeting will be held on November 7 this year to obtain the approval of the company's shareholders. As many as 71,23,809 warrants will be issued to the promoter, while the rest will be offered to the non-promoter public.

The two projects that the company bagged are in the road and water treatment sectors. The deal which is worth Rs 7,300 crore involves the construction of a six-lane elevated highway corridor apart from improving the condition of an existing road in the state of Maharashtra. The company is expected to complete the work in four years. It will be in the DFBOT model -- where a private firm designs, builds, finances, operates, and then transfers a project to the government after a concession period. The dela carries a concession period of 29 years.

The other deal is about the construction of a 910 MLD water treatment plant in Panjrapur in Maharashtra. Wellspun has to deliver the civil, mechanical, electrical, and instrumentation work, which has to be completed in four years. Wellspun has to operate and maintain it for 15 years.

In Q1FY26, the company reported sales of Rs 845 crore -- a dip of 9.13% from the year ago figure of Rs 930 crore. The net profit figure, too, dropped 2% (y-o-y) from Rs 110 crore to Rs 101 crore. Welspun Enterprises is a part of the $2.7 billion Welspun Group.