Shares of Dilip Buildcon Ltd surged 11% on 10 September after the company received a Letter of Intent (LoI) from the Petroleum and Natural Gas Regulatory Board (PNGRB) for a major LPG pipeline project.

Under the project, Dilip Buildcon will develop an LPG pipeline connecting Paradip in Odisha with Raipur in Chhattisgarh. The company will receive authorisation to design, finance, build, operate and maintain the pipeline, subject to the required regulatory approvals. The project carries a construction period of three years, followed by an operating period of 25 years.

The company will also have the right to levy and collect transportation tariffs from users of the pipeline. The infrastructure is expected to transport LPG to bottling plants operated by various oil marketing companies. It will also help replace road-based transportation through LPG tankers, potentially improving the efficiency and safety of LPG movement along the route.

The project is particularly significant because it gives Dilip Buildcon exposure to a long-term infrastructure asset rather than only a conventional construction contract. The company plans to execute the project through a wholly owned special purpose vehicle, while the EPC component is valued at around Rs 1,800 crore, excluding GST. Construction is expected to take 36 months.

The new project comes at a time when Dilip Buildcon is expanding beyond its traditional road construction business into infrastructure assets that can generate recurring revenue. The company is also pursuing its broader DBL 2.0 strategy, which focuses on developing and monetising long-term infrastructure assets.

The stock had touched a 52-week high of Rs 585 and a 52-week low of Rs 381.55. At 12:11 pm, the shares of Dilip Buildcon were trading 5.22% higher at Rs 413.55 on NSE. 

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