Stock Crash: PNC Infratech shares tank 18%, extend losses from 52-week high on this negative development

Shares of PNC Infratech Ltd. fell as much as 17% on Tuesday, September 15, after the company was debarred from bidding for any Highway Authority of India (NHAI) and Ministry of Road Transport and Highways (MoRTH) projects for a three year period.

This is the biggest single-day fall for the stock since October 21, 2024, during which the stock had declined 20%.

The reason cited behind this decision is issues pertaining to structural distress reported on the Kanpur-Lucknow Expressway Package-II. Prospects of the company are impacted as NHAI their biggest client.

NHAI had earlier initiated disciplinary action last month after these developments. However, it must be noted that the ongoing projects, and projects for which the company has emerged as the L1 (lowest) bidder, will not be impacted.

PNC Infratech said in a statement to the exchanges that the company is currently evaluating legal remedies after these developments. As of June this year, NHAI contributed to nearly 36% of PNC Infratech's overall order backlog of ₹19,200 crore.

The company had been hit with a one-year ban in October last year on bribery allegations, which was later lowered down to four months.

Back in August, the NHAI had issued a notice proposing to declare PNC Infratech as a non-performer, under which, the company would have become ineligible to bid for future NHAI projects.

The notice also included proposals to levy a penalty of 2% of the performance security and downgrading PNC Infratech's rating, which will adversely impact its eligibility for future NHAI projects.

Shares of PNC Infratech are trading 17.5% lower on Tuesday at ₹144.7. The stock is down 55% from its 52-week high of ₹325 and 44% of the overall loss has come during the course of this year itself.