Power Mech shares: Vedanta Power's Rs 970 crore order gives stock 3% lift

Shares of Power Mech Projects Ltd rose as much as 3 per cent in Wednesday’s trade after the company said it secured an order worth Rs 970 crore from Vedanta Power Ltd for operations and maintenance (O&M) work at its Sakti Thermal Plant in Chhattisgarh.

In an exchange filing dated September 9, Power Mech Projects said the order was awarded by Vedanta Power Ltd's Sakti Thermal Plant for providing end-to-end O&M services at the 2x600 MW thermal power plant located in Sakti district, Chhattisgarh.

Power Mech Projects shares were trading at Rs 2,444.30 on Wednesday, up 1.32 per cent from their previous close of Rs 2,412.55. The stock opened at Rs 2,418.75 and hit a high of Rs 2,485.90, marking a gain of around 3 per cent over its previous close. It also touched a low of Rs 2,407.60 during the session.

The company said the total order value is Rs 970 crore, comprising a basic order value of Rs 890 crore and Rs 80 crore provision for additional services, excluding GST.

The contract is classified as an operations and maintenance order and is to be executed within 60 months from the date of issuance of the Letter of Intent (LOI) or order confirmation.

The order has been awarded by a domestic entity and is itself classified as a domestic contract. Power Mech Projects also said that the promoters or promoter group companies have no interest in Vedanta Power, which means the contract does not fall under a related-party transaction.

Vedanta Power's Sakti Thermal Plant is a 1,200 MW coal-based plant comprising two 600 MW units in Chhattisgarh. One 600 MW unit is operational, while the second unit is under construction.