Infra stocks up as cabinet okays land acquisition ordinance

Stocks of infrastructure companies made strong gains after the union cabinet on Monday took the ordinance route to amend the Land Acquisition Act, aimed at removing land acquisition blocks in infrastructure developments.

Several large public-private partnership projects are stalled because of land acquisition issues. Such PPP projects account for 60 per cent of the Rs18 lakh crore worth of stalled projects.

The cabinet approved an ordinance to make amendments to the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, enacted by the previous United Progressive Alliance government.

The ordinance does away with the clause for written consent from 70 per cent of landowners for PPP projects in the infrastructure and social infrastructure sectors. Also, social impact assessment won't be required for such projects.

Infrastructure projects related to rural infrastructure, electrification, industrial corridors and PPP projects being exempted would result in faster land acquisition and result in movement of projects which have been stuck for want of land for a long time, added the report.

Infra stocks wren also buoyed by reports of fresh business orders. Engineering firm Larsen & Toubro (L&T) on Tuesday said it bagged contracts worth Rs2,521 crore in its building and factories business in both domestic as well as international markets this month.

KEC International bagged orders worth Rs1,412 crore in T&D and cable businesses, according to Ramesh Chandak, MD & CEO. The average margins for these new orders would be over 10 per cent, which are much better than earlier 5.5-6 per cent margins.

The Sensex ended up 95.88 points at 27499.42, and the Nifty was up 34.45 points at 8282.70 on Wednesday. About 1671 shares advanced, 1196 shares declined, and 126 shares were unchanged. BHEL was up 3 per cent while NTPC, Dr Reddy's Labs, Reliance and Tata Power were gainers while M&M, HDFC Bank, Bajaj Auto, Maruti and HUL were losers.