PNC Infra gets relief from High Court in disqualification order by MoRTH, NHAI

With the order, the appeal by PNC Infra has been disposed of, and there will be no business hit due the disqualification order on the company.

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Shares of infrastructure and construction company PNC Infratech were higher by more than 3% in early trade on December 26 before cooling off, after the Delhi High Court directed MoRTH and NHAI to consider revocation of an earlier disqualification order against the company within four weeks, the company informed through an exchange filing.

On October 18, MoRTH had disqualified PNC Infra and its two SPVs from participating in tendering process for one year. The decision was challenged by the company through a writ petition on October 21, which too was dismissed. The company challenged both these orders before the Division Bench of Delhi High Court in November through a Letters Patent Appeals. A Letters Patent Appeal (LPA) allows legal remedy to a party, to appeal a High Court judge's decision to a larger bench in the same court.

Subsequently, the Division Bench of the Delhi High Court directed the Ministry of Road Transport (MoRTH) and Highways and National Highway Authority of India (NHAI) to consider the revocation of the aforesaid disqualification order "...as expeditiously as possible and preferably within a period of four weeks from date."

With the order, the appeal by PNC Infra has been disposed of, and there will be no business hit due the disqualification order on the company. "There will not be any impact on the ongoing development, construction, operations and maintenance activities of the company and its subsidiaries, including the two SPVs on account of the aforesaid order..."

As of September 30, the company’s unexecuted order book stands over Rs 19,900 crore, higher than its market capitalisation, with three EPC contracts for aggregate value of Rs 6,670 crore. PNC Infratech has a market capitalisation of Rs 8,200 crore, and the shares are down by 10% so far this year. In terms of the total unexecuted order book of Rs 19,900 crore, the value of MoRTH and NHAI contracts comes to about 33%.

The first half of the fiscal saw 'unprecedented subdued' activity, largely due to widespread monsoon and low new projects awards by MoRTH, including NHAI, as well as due to the general elections.