PNC Infratech shares tumble 6% after NHAI suspends toll collection on expressway

Shares of PNC Infratech Ltd plunged more than 6 per cent to slip to Rs 238.90 during the trading session Thursday after the National Highways Authority of India (NHAI) took action against the construction company over slippage detected on the Kanpur-Lucknow Expressway.

NHAI initiated action against concessionaire PNC Infratech Ltd after slippage was found along an approximately 300-metre stretch of the expressway. Following the discovery, the authority suspended toll collection on the corridor and said no toll would be charged until the affected portion is completely repaired.

The highways authority also said the toll revenue lost during the suspension period would be recovered from PNC Infratech. The company later issued a clarification, saying certain isolated stretches of the project were affected because of recent heavy and incessant rains, and that the total affected length was 300 metres, or less than 0.5% of the entire expressway.

In a regulatory filing to the exchanges, the company said, "As part of the routine maintenance obligations, the concessionaire took immediate actions/measures and repaired/rectified the majority of affected stretches and maintenance works on the remaining few stretches are already underway in full swing." It said that most of the damaged stretch has already been repaired, while work on the rest is continuing.

PNC Infratech also said it has neither been debarred nor declared a non-performer by NHAI. The clarification came amid reports that the authority had tagged the company as a non-performer, a status that could make it ineligible to bid for future projects if upheld. The company rejected that claim.

In its filing, PNC Infratech said it is submitting formal replies to the notices issued by NHAI. It also said the repair costs, estimated at around Rs 3 crore, had already been accounted for in its routine maintenance budget.

The company said the issue would have no material impact on its ability to continue operations or bid for new contracts. The developments come as NHAI keeps toll collection on hold until repairs on the affected stretch of the Kanpur-Lucknow Expressway are completed.