Shares of PNC Infratech dropped 20% to hit the lower circuit at ₹366 on October 21, following a one-year disqualification from participating in tenders issued by the Ministry of Road Transport & Highways. The ban, which came into effect on October 18, 2024, also extends to the company’s subsidiaries, PNC Khajuraho Highways and PNC Bundelkhand Highways.
Background and Cause of Ban
The Ministry’s decision follows an FIR and subsequent charge sheet filed by the Central Bureau of Investigation (CBI) in June and August 2024, respectively. The company was given an opportunity to present its case during a personal hearing with the ministry on October 18, but the decision to disqualify was upheld.
Company’s Response and Clarification
PNC Infratech has clarified that the ban only affects tender participation for new projects under the ministry, while ongoing development, construction, and operations & maintenance (O&M) activities will continue unaffected. The company intends to evaluate and communicate any potential impact on its broader operations as the situation evolves.
Recent Contract Wins
Despite the setback, PNC Infratech recently secured two significant contracts worth a total of ₹4,630 crore from the Maharashtra State Road Development Corporation. The first project, valued at ₹2,268 crore, involves the construction of the access-controlled Pune Ring Road, while the second, worth ₹2,362 crore, covers the building of a connector expressway linking the Hindu Hrudaysamrat Balasaheb Thackeray Maharashtra Samruddhi Mahamarg from Jalna to Nanded. Both projects are to be completed within 30 months, utilizing the engineering, procurement, and construction (EPC) model.
Stock Performance and Analyst Outlook
PNC Infratech’s shares have experienced a decline of over 27% in the last three months, significantly underperforming the Nifty 50 index, which gained 1% during the same period. Among 16 brokerages that cover the stock, 12 have issued a ‘buy’ rating, three a ‘hold,’ and one a ‘sell’ recommendation.
The company’s participation in key infrastructure projects will be closely monitored, especially considering the implications of the ban on future revenue growth.
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Source: Moneycontrol
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