SPML Infra Limited's promoter, Niral Enterprises Pvt Ltd, has created an encumbrance by pledging 1,643,914 shares, representing 2.18% of the company, to SBICAP Trustee Company Ltd. The pledge was made on behalf of National Asset Reconstruction Company Ltd (NARCL), which is acting as the lender in this transaction.

Disclosure Details

The company made this disclosure to stock exchanges in compliance with SEBI takeover regulations following the creation of the pledge. This move highlights the ongoing financial activities within SPML Infra's promoter group.

Impact on Shareholding

As a result of this pledge, Niral Enterprises' unencumbered holding in SPML Infra has reduced from 3.49% to 2.75%. However, the total shareholding of Niral Enterprises in SPML Infra remains unchanged at 2,630,553 shares.

Regulatory Compliance

SPML Infra Limited, in adherence to Regulation 31(2) and 31(3) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, received the disclosure from Niral Enterprises Pvt. Ltd on November 19, 2023. This disclosure was made subsequent to the creation of the encumbrance over the shares of the company held by Niral Enterprises in favor of SBICAP Trustee Company Ltd.

Implications

The pledge of shares by promoters may have various implications:

1. It may indicate that the promoter is raising funds, possibly for business expansion or to meet other financial obligations.
2. The pledge could potentially impact the promoter's voting rights and control over the company, depending on the terms of the agreement.
3. Investors often monitor such activities closely as they can provide insights into the financial health and strategies of the company's key stakeholders.

Company Background

SPML Infra Limited operates in the infrastructure sector, particularly in water and power projects. The company has been involved in various infrastructure development initiatives across India.

SPML Infra Limited , a leading infrastructure development company, has reported stable quarterly results for Q2, while setting ambitious targets for future growth and expansion into the Battery Energy Storage Systems (BESS) sector.

Q2 Financial Highlights

SPML Infra delivered a steady performance in the second quarter:

The company's performance remained consistent with its guided margin range, despite the traditionally slower second quarter for infrastructure companies due to extended monsoons and other seasonal factors.

Order Book and New Projects

SPML Infra has secured significant new orders, strengthening its position in the water infrastructure sector:

• New orders worth Rs 3,772.00 crore across multiple states including Jharkhand, Madhya Pradesh, Rajasthan, and Tamil Nadu
• Current L1 (lowest bidder) position in tenders worth approximately Rs 1,125.00 crore
• Existing order book of around Rs 1,600.00 crore

The company is targeting a total order book of Rs 5,000.00 crore for the current fiscal year, with a focus on fully funded projects that meet its strategic criteria.

Expansion into BESS Sector

In a significant move to diversify its portfolio, SPML Infra is advancing its entry into the Battery Energy Storage Systems (BESS) sector:

• Phase I of a 2.5 GWh BESS manufacturing facility at Pune MIDC is progressing on schedule
• Targeted commissioning by Q1 FY27
• Phase II expansion planned for FY28

The company sees substantial potential in the BESS market, which is projected to reach 236 GWh by 2031-32, representing an investment opportunity of approximately USD 57.00 billion.

Financial Position and Future Outlook

SPML Infra has strengthened its financial footing:

• Bank facilities enhanced from Rs 205.00 crore to Rs 505.00 crore
• Received approval for a Surety Bond from a leading insurance company
• Recognized as a "Stable" firm by ICRA for its financial and banking facilities

The company expects its revenue contribution from new orders to increase significantly in the coming quarters, potentially improving overall profitability due to higher margins on these projects.

Management Commentary

Manoj Digga, Director Commercials & Chief Financial Officer, stated, "The first half of the current fiscal has been a defining period for SPML Infra, reflecting strong order inflows and strategic progress across both our core water and power infrastructure business and the emerging energy storage segment."

He added, "Our focus remains on profitable growth, selective bidding, and strong project execution. This disciplined approach has enabled SPML to sustain healthy margins and strengthen our project mix, building a foundation for long-term growth."

SPML Infra's expansion into the BESS sector, coupled with its strong performance in its core infrastructure business, positions the company for sustained growth in the coming years. As the company executes its order book and capitalizes on new opportunities in water, power, and energy storage, investors will be watching closely to see if SPML Infra can deliver on its ambitious targets.