By Akshay Jain
In accordance with the recent financial structure of the Infrastructure Industry Companies and their future outlook, they are finding difficulties in relation to servicing of principal repayment of debt and the corresponding interest amounts. One of the widely known groups Gammon India along with its listed subsidiary – Gammon Infrastructure (GIPL) is also facing this issue. Where the subsidiary is making Operating Profits, its even difficult for the Parent Company – Gammon India Ltd to survive with the operations. Gammon India has been declared by the banks as NPA from June 2017 onwards where the Company has made defaults on debt and now looking for the debt restructuring plans. The auditors have also raised a question on the Going concern assumption of the Parent Company.
However, GIPL is making good operating profits due to higher margin but booking net loss due to increased depreciation on account of Capex and continuous interest cost.
We see a rise in GIPL and fall in Gammon India share value as the parent company is also planning to spin off its business to GIPL due to its good reputation in the market.
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