H.G. Infra Engineering Sells 49% Stake in Infra SPV to Neo Infra Fund

$HGINFRA H.G. Infra Engineering has divested a 49% stake in its infrastructure subsidiary, H.G. Raipur Visakhapatnam OD-5 Private Limited, to Neo Infra Income Opportunities Fund (a SEBI-registered Category II AIF). The initial transaction was finalized on June 5, 2026, marking the entity's transition from a wholly-owned subsidiary to a joint subsidiary. Deal Structure & Consideration: The total consideration for the entire stake is ₹377.40 crore, structured in two tranches: Tranche 1 (Completed): ₹121.80 crore received on June 5, 2026, against the transfer of the 49% stake. Tranche 2 (Pending): The balance amount corresponding to the remaining 51% stake is scheduled to be received by September 30, 2026, subject to completion conditions. Upon this, H.G. Infra will fully exit the SPV. Subsidiary Financial Profile (FY26): Revenue: ₹325.59 crore (representing 6.22% of H.G. Infra’s consolidated revenue). Net Worth: ₹139.59 crore (representing 4.28% of consolidated net worth as of March 31, 2026). Strategic Significance: Asset Monetization & Capital Recycling: Selling operational infrastructure assets to institutional funds allows H.G. Infra to unlock trapped capital and recycle it into new, higher-return EPC or HAM (Hybrid Annuity Model) project bids. Balance Sheet Strengthening: The ₹121.80 crore immediate cash inflow (with more to follow) will improve liquidity, aid in debt reduction, and enhance return ratios (ROE/ROCE). Arm’s-Length Execution: The buyer is an independent institutional investor managed by Neo Alternative Asset Managers, ensuring the transaction is strictly non-related party and executed at fair market value. Outlook: The pending sale of the remaining 51% by Q2 FY27 will complete the capital recycling cycle for this specific asset. Investors will track the deployment of these proceeds into H.G. Infra's core order book and the subsequent impact on the company's consolidated revenue base post-consolidation exit.