KNR Constructions Limited has announced a significant divestment deal, executing share purchase agreements with Indus Infra Trust for the sale of its complete shareholding in four road infrastructure projects. The transaction, valued at ₹1,543.19 crore, represents a strategic exit from these special purpose vehicles.

Transaction Details

The share purchase agreements were signed on December 24, covering the company's 100% shareholding, including sub-debt, in four road special purpose vehicles. The entities involved in this divestment are:

• KNR Palani Infra
• KNR Ramagiri Infra
• KNR Guruvayur Infra
• KNR Ramanattukara Infra

Financial Structure

The transaction's financial breakdown demonstrates substantial returns for KNR Constructions:

The company had invested ₹566.83 crore in equity and sub-debt across these four SPVs, making the total proceeds significantly higher than the initial investment.

Regulatory Requirements and Timeline

The divestment is subject to several approvals and conditions that must be fulfilled before completion. These include regulatory approvals, authority clearances, and lender approvals. Additionally, the transaction must comply with share transfer restrictions under the respective concession agreements with the National Highways Authority of India.

The parties expect to complete the entire transaction process by September.

About the Buyer

Indus Infra Trust, the acquiring entity, is a publicly listed infrastructure investment trust. KNR Constructions has clarified that Indus Infra Trust is not part of the promoter group, ensuring the transaction's independence and transparency.

Market Performance

Shares of KNR Constructions closed at ₹172.49 on Wednesday, registering a gain of 7.99% on the National Stock Exchange, reflecting positive market sentiment around the company's strategic moves.

KNR Constructions Limited has informed stock exchanges about receiving a significant income tax demand order of ₹72.03 crores for Assessment Year 2007-08. The company filed this disclosure under Regulation 30 of SEBI (LODR) Regulations, 2015.

Income Tax Demand Details

The Assistant Commissioner of Income Tax, Central Circle-2(2), Hyderabad issued the consequential order. The demand breakdown is as follows:

Nature of Tax Dispute

The income tax demand relates to alleged short-term capital gains on the sale of agricultural land during the financial year 2006-07. This represents a consequential order following an Income Tax Appellate Tribunal (ITAT) order for Assessment Year 2007-08.

Company's Response Strategy

KNR Constructions has outlined its approach to contest the income tax demand. Based on the merits of the matter and advice from legal counsel, the company plans to file an appeal before the Honourable High Court of Telangana against the ITAT order.

Expected Financial Impact

The company has assessed that it does not expect any material financial and operational impact at this point in time. KNR Constructions has committed to inform stock exchanges of any material developments on this matter in accordance with Regulation 30(7) of the SEBI Listing Regulations.

Regulatory Compliance

The company acknowledged a delay in submitting the regulatory filing within the required timeframe and sought condonation for the same. Company Secretary Haritha Varanasi signed the disclosure document, ensuring compliance with stock exchange notification requirements.