NBCC Signs ₹3,500 Crore MoU for Phase 1 Development in Lucknow

NBCC (India) Limited, a government-owned construction major, has announced a significant collaboration with Sarkari Awas Nirman Avam Vitt Nigam Ltd. The two entities have signed a Memorandum of Understanding (MoU) for the development of Poorvi Vihar in Lucknow. This project spans approximately 588 acres, with NBCC taking on the role of Project Management Consultant.

The share price of NBCC opened at ₹81.12 on the NSE and reached an intraday high of ₹84.15. However, the price has significantly declined from its intraday high and is now trading below ₹80 at ₹79.34, down by 6.10%, as of 2:26 PM on January 13, 2025.

Phase 1 Highlights

The MoU outlines the initial focus on Phase 1, which involves the planning, designing, and development of a 50-acre encumbrance-free site. This phase is valued at approximately ₹3,500 crore. NBCC has committed to delivering this project under the agreed terms and conditions set forth in the MoU.

The execution model follows a “deposit work” basis, where NBCC will charge a 10% agency fee on the actual project cost, along with applicable GST and taxes.

Scope of the Project

The broader development of Poorvi Vihar is envisioned as a mixed-use land development initiative. NBCC’s responsibilities include:

• Securing possession of the designated land.
• Preparing and executing comprehensive project plans.
• Ensuring compliance with design and development standards.

This project falls under NBCC’s routine course of business and aligns with its expertise in large-scale urban development projects.

Financial Framework

As per the MoU, the project adheres to a “deposit work” financial model, ensuring transparency and accountability. NBCC will earn agency charges based on the actual project expenditure, incentivising cost-effective project management.

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