Intellect Design Arena falls 6% on quitting government procurement website

Shares of Intellect Design Arena Ltd fell over 6 percent on July 7, its biggest drop in eight months after it has been requested to leave the government's eMarketplace due to a competitor offering lower pricing.

The stock hit a low of Rs 575 on BSE. At 1pm, the stock was trading at Rs 586 on BSE, down 6.01 percent from its previous close. Benchmark Sensex fell 0.6 percent to 65387 points.

The competitor involved in this situation remains unnamed. GeM has recently released the Final Rate Contract (FRP), and a competitor has submitted a quotation that is around 48% lower than the indicative pricing set by the government. Furthermore, this competitor's pricing is nearly 16% lower than the pricing offered by Intellect. As a result, GeM has notified Intellect to initiate the Exit Management & Transition process in accordance with the existing terms and conditions of the contract between GeM and Intellect, the firm said in a notice to exchanges.

For FY23, Intellect Design Arena reported a revenue of Rs253.50 crore from its engagement with GeM. The associated costs amounted to Rs241.83 crore, resulting in a margin of Rs 11.67 crore.