Shares of Ceigall India climbed nearly 4% after the infrastructure company received a Letter of Intent (LoI) from REC Power Development and Consultancy for a power transmission project in Gujarat valued at Rs 5,300 crore.

REC Power Development and Consultancy is a wholly-owned subsidiary of state-run REC Ltd, which serves as the bid process coordinator for transmission projects awarded through the tariff-based competitive bidding (TBCB) route in India.

The contract covers the construction of a 765/400 kV Air Insulated Switchgear (AIS) substation along with approximately 300 km of transmission lines. The project has a scheduled execution period of 36 months, after which it will enter an operational phase lasting 35 years.

During the operational period, Ceigall India will receive annual transmission charges of Rs 608.67 crore.

The award marks a significant order win for the company in Gujarat's power transmission sector. For Ceigall India, which listed on the stock exchanges in August 2024 and has historically derived the bulk of its revenue from road and highway projects, the win deepens its presence in the power transmission segment. The 35-year operational phase with fixed annual transmission charges also shifts a portion of the company's revenue profile toward long-term annuity-type income, distinct from its engineering, procurement, and construction (EPC) business model.

India's power transmission sector has seen a steady pipeline of large projects in recent years as the country expands renewable energy capacity, with high-capacity 765 kV corridors forming a key part of the transmission build-out.

Source: Economic Times Markets