NCC Ltd share price closed lower today amid reports that the newly formed YS Jaganmohan Reddy government had decided to cancel projects sanctioned by Chandrababu Naidu in Andhra Pradesh.
These projects running into thousands of crores of rupees were hurriedly sanctioned by Naidu-led TDP government just days before the schedule for the general elections was announced in March and the foundation stone laid by Naidu for them.
Hours after Jagan Mohan Reddy took over the reins of Andhra Pradesh on Thursday, its chief secretary LV Subrahmanyam wrote a letter to all the departments stating that works sanctioned prior to April 1, 2019 but not grounded (work not commenced) are cancelled.
Construction company NCC is seen affected by the order.
NCC share price ended 16.33% or 19 points lower at 97.85 on BSE.
NCC share price fell up to 18.60% to an intra day low of 95.20 in trade today. It opened at a loss of 6% today at 110 compared to the previous close of 116.95 on the BSE. In today's trade, the stock traded in a wide range of Rs 14.80 on BSE and was highly volatile with an intraday volatility of 12.52%.
NCC share price has gained 11.07% since the beginning of this year and lost 18.53% during the last one year. It has fallen over 1 per cent in one month and over 10 per cent in the last week. The stock traded higher than 100, 150 -day simple moving averages but has moved below its 30-day and 50-day simple moving averages today.
A total of 76.56 lakh and 987.37 lakh shares changed hands on BSE and NSE, respectively, both above the 5-day average volume traded for the stock.
In a communication to the bourses, the firm said, "We understand that the new government is considering to cancel work orders issued prior to April 1 but not grounded (work not commenced). If this were to happen, work orders approximately worth Rs 6,100 crore issued to our company are likely to be cancelled."
The company further said it did not receive any communication from the government on the issue.