The stock declined as much as 5.6% to ₹225.6 apiece and was trading near the day’s lows. The decline follows Thursday’s 5.8% drop, taking the stock’s two-day losses to more than 11%.
According to a press release issued by the Ministry of Road Transport and Highways on August 5, NHAI has served a notice proposing to declare PNC Infratech a non-performer, under which the concessionaire would become ineligible to participate in future NHAI bidding.
The proposed action stems from a 300-metre pavement slippage observed on the Kanpur-Lucknow Expressway on July 26. Following the incident, NHAI initiated restoration work, ordered a comprehensive technical assessment and began disciplinary proceedings against stakeholders responsible for deficiencies in project execution and supervision.
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The authority has also issued a show-cause notice proposing multiple actions against the concessionaire, including:
- Levying a penalty equivalent to 2% of the performance security.
- Initiating debarment proceedings of up to three years against the Head of Pavement/Highways and other responsible staff.
- Downgrading the concessionaire’s Pavement Condition Index (PCI) rating, which could adversely affect its eligibility for future NHAI projects.
NHAI has also directed PNC Infratech to undertake complete rectification of the affected stretch at its own cost, currently estimated at around ₹3 crore, with no financial implication for the authority. The show-cause notice gives the company an opportunity to respond before any final action is taken.
The proposed non-performer classification is significant because NHAI is one of the country’s largest road project awarding authorities, and any restriction on bidding could affect PNC Infratech’s ability to secure new orders in the highways segment.
As part of the wider action following the incident, NHAI has also suspended toll collection on the Kanpur-Lucknow Expressway until the affected stretch is fully restored, with the resulting toll revenue loss to be recovered from the concessionaire.The authority has also initiated disciplinary action against project officials, proposed debarment of the project’s independent engineer from future NHAI assignments, and constituted an expert committee led by IIT Kharagpur’s Professor K.S. Reddy to investigate the underlying causes of the pavement failure.
Shares of PNC Infratech are now trading 5.4% lower on Friday at ₹226.7. The stock is now down 10% for the year.
