Afcons Infrastructure shares gained as much as 4.4% to Rs 290.90 on 25 August after the company received a favourable arbitral award worth Rs 335.50 crore against the Uttar Pradesh Expressways Industrial Development Authority (UPEIDA). 

The award is expected to have a positive impact on Afcons’ financial position and comes at a time when investors are closely tracking the company’s earnings and cash flows.

The Arbitral Tribunal awarded Afcons a principal amount of Rs 152.25 crore in the dispute with UPEIDA. In addition, the company was awarded Rs 183.25 crore in pre-award and pendente lite interest, taking the total award to Rs 335.50 crore. 

The interest was calculated at the State Bank of India’s Base Rate with quarterly rests from May 1, 2019, to August 24, 2026.

The award is important for Afcons because the interest component is higher than the original principal claim. The company said the award will have a positive impact on its financial position. However, the amount is payable subject to UPEIDA not challenging the award within the stipulated period prescribed under law. This means the full cash benefit may not be immediate.

The development also comes against the backdrop of a weaker first quarter for Afcons. The infrastructure company reported a 77.7% year-on-year decline in consolidated net profit to Rs 30.60 crore in Q1 FY27, while revenue from operations fell 20.75% to Rs 2,671 crore. As a result, the arbitration award could provide additional financial support if the amount is successfully realised.

For Afcons, the award could help ease some pressure on liquidity and working capital, particularly if the payment is received without a prolonged legal challenge. 

The company has been involved in several arbitration proceedings related to large infrastructure projects, making successful claim resolutions an important factor for its cash-flow position.

At 1:50 pm, the shares of Afcons Infrastructure were trading 2.42% higher at Rs 285.40 on NSE.

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