PNC Infratech Ltd. said on Monday that it has filed three separate writ petitions in the Delhi High Court challenging a recent order issued by the Ministry of Road Transport & Highways.
The order, dated Oct. 18, disqualifies the company and its two special purpose vehicles—PNC Khajuraho Highways Private Ltd. and PNC Bundelkhand Highways Private Ltd.—from participating in any tender processes for a duration of one year.
The company filed the petitions on Monday, seeking immediate relief from the disqualification, which is linked to an ongoing Central Bureau of Investigation inquiry related to a bribery case. Along with the writ petitions, PNC Infratech has requested ad-interim orders to stay the operation and implementation of the disqualification until the petitions are resolved.
The Ministry of Road Transport & Highways' decision sent PNC Infratech's shares plummeting 20% to their lower circuit on Monday. Brokerage firm JM Financial believes that the pace of incremental order inflows would slow down following MoRTH's decision, while downgrading PNC's stock to "hold" rating from "buy."
PNC Infratech will aim to pivot its focus toward securing projects from state entities such as MSRDC, UPEIDA, and CIDCO, while also exploring non-highway verticals like metro rail, water supply projects, and railways, the research firm added.
MoRTH's decision came after that the reports of CBI conducting searches at PNC's corporate offices, as well as at the residences of key executives, including Managing Director Yogesh Kumar Jain and Whole Time Director TR Rao, on June 8. The investigation centers around allegations of bribery, which have now raised serious concerns regarding the company's future participation in government tenders.
At market close the stock continued to remain 20% down and closed at Rs 366.80 apiece on NSE. Out of 19 analyst tracking the company, 14 maintained a 'buy' rating, three maintained a 'hold' rating and two maintained a 'sell' rating. The total traded volume of the stock was 6.4.
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