Shares of HG Infra Engineering declined over 2% on Thursday, May 21, after the company said it has excluded Maharashtra State Road Development Corporation (MSRDC) projects worth more than Rs 4,100 crore from its executable order book amid uncertainty over project execution.
The stock fell 2.44% to Rs 580.25 on the NSE after the disclosure.
In an exchange filing, HG Infra Engineering stated that MSRDC had returned the bank guarantees submitted by the company for the projects without providing any formal explanation.
The company said it had sought clarification from MSRDC regarding the status of the projects and the reasons behind the return of the bank guarantees, but no formal communication has been received so far.
Due to the uncertainty surrounding the projects, HG Infra said it has decided, “as a matter of prudence,” not to include these projects in its executable order book until further clarity emerges.
The impacted projects relate to two engineering, procurement and construction (EPC) contracts for sections of the Nagpur-Chandrapur Access Controlled Super Communication Expressway in Maharashtra.
Earlier, on May 21, 2024, HG Infra had informed exchanges that it had emerged as the lowest bidder for the two MSRDC projects.
For one 28-kilometre section, MSRDC’s estimated project cost stood at Rs 1,554.45 crore, while HG Infra’s bid value was Rs 1,991.11 crore.
For another 31.75-kilometre section, the estimated project cost was Rs 1,654.92 crore, while HG Infra’s bid amount stood at Rs 2,151.11 crore.
The total impacted project value now excluded from the order book stands at approximately Rs 4,142 crore.
At the end of the December quarter, HG Infra Engineering had reported an overall order book of Rs 13,625 crore. The company is yet to announce its March quarter earnings.
The uncertainty over execution of the Maharashtra road projects and the exclusion of orders from the executable order pipeline weighed on investor sentiment during Thursday’s session.
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