On December 18, 2006, the Hyderabad-based Lanco Group partnered with UK-based Globeleq to emerge as a successful bidder for the 4,000-mw ultra mega power project at Sasan in Madya Pradesh. It had quoted Rs 119.6 per unit as against Rs 129.6 by Reliance Energy and Rs 141.2 by Tata Power. This power project was the first in the series of seven ultra mega power projects being planned by Centre.

Soon after, Globeleq Singapore sold its 70% stake in the joint venture to Lanco Infratech and Jindal Steel & Power after winning the bid. However, other bidders like Reliance Energy Generation and NTPC raised objections to the bid as the lead bidding company or Globeleq Singapore had sold off its stake to others.

To settle this issue, the government appointed an Empowered Group of Ministers (EGoM) to decide on the controversial bidding process. The panel found the Globeleq-Lanco bid null and void.

The Lanco Infratech scrip is trading down 17.4 points, or 7.44%, at 216.6 on the BSE.

So, what’s lies ahead for Lanco Infratech? It can approach the courts but the chances are slim. We asked analysts tracking the sector whether they would re-rate this stock post Sasan.

Deven Choksey of KR Choksey Securities is unsure how bad has the Sasan news affected the company. “The news is disappointing and at the same time one cannot be sure of how exactly it will impact the company in the immediate term. One will have to wait-and-watch and calculate thereafter. Some more clarifications are also required on this subject. Going forward, what would be the way as far as this project is concerned. One will have to get some clarification from the management,” he said.