BF Utilities - Event Update : Target 680: Anand Rathi

BF Utilities - Event Update                                               CMP 470                                                             Target 680

Project - Nandi infrastructure Corridor Enterprise (NICE) (74.5% holding) Project – BMIC – Bangalore Mysore Infrastructure Corridor Project.

Event – The key asset for the company is the project BMIC (Bangalore Mysore Infrastructure Corridor Project) – A 164km tolled expressway connecting the cities Bangalore and Mysore. It includes a peripheral road in Bangalore, 5 New Townships along the Expressway (the first Section A involves 7,290 acres land), a Town Planning Authority status, and a Concession period for the toll of 40 years. The BMIC is 75% owned by BF utilities. It has a single planning authority – Bangalore Mysore Infrastructure Corridor Area Planning Authority (BMICAPA) for the entire project.

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The project is partly operational with the rest held up due to pending handover of land by the government of Karnataka. This high potential project has been stuck for over a decade due to land handover issues, and the firm is making losses. However recent reports indicate that now it may be close to resolving the issue as the Supreme Court has asked Karnataka to handover the Nandi project land to the company. PE fund raising plans are also in discussion who will invest in the development in the project.

This project has immense potential and is also very important for the growth of the South Bangalore and Mysore. Seeing the judgment the major trigger for the stock would be the handing over of the land and progress on the project going forward. Much of the value is dependant upon a successful handover of committed lands, followed by execution, commissioning, launch and success of sub-projects. This would further help the company to create value for itself as well the shareholders. This would further help the stock to re rate.

Technical Outlook

BF Utilities - Stock has closed highest in 34weeks and has giving a break-out above trading range. Stock has given YTD-Year till date returns of 65% and looks good to target Rs.550 for short term and with 400 as major support 680 is possible on higher side. Stock trades above all major moving averages with 100DMA Rs.400, 50DMA Rs.398 and 200DMA Rs.396.

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