Why Did KEC Shares Plummet Over 7% After Power Grid Corp's New Bid Ban?
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Synopsis
KEC International faces a setback as Power Grid Corporation bars the company from new bids for nine months. Despite the drop in share price, KEC remains optimistic about its existing projects and future prospects.
Key Takeaways
- KEC International shares fell by 7.2%.
- Bar from new bids lasts for nine months.
- Current projects remain unaffected.
- KEC's revenue grew by 19% year-on-year.
- Company exploring legal options.
New Delhi, Nov 19 (NationPress) Shares of the infrastructure engineering and construction firm, KEC International, experienced a significant drop of 7.2%, reaching an intra-day low of Rs 724.70 on Wednesday. This decline followed the company's announcement that the government-owned Power Grid Corporation of India has prohibited it from participating in new tenders for a duration of nine months.
As of 12:10 pm, the stock was valued at Rs 734.30, reflecting a decrease of Rs 47.40 or 6.06% on the day.
KEC International revealed in an exchange filing that it received notification from Power Grid Corporation of India Limited (PGCIL) indicating its exclusion from participating in PGCIL tenders and contract awards for a period beginning November 18, 2025.
The company reassured stakeholders that ongoing projects with PGCIL will remain unaffected, as the ban solely pertains to new bids and does not impact current contracts.
The restriction is attributed to an alleged breach of contractual agreements related to previous communications sent to stock exchanges.
In March, the Central Bureau of Investigation arrested a senior official from both PGCIL and KEC International due to allegations of a Rs 2.5 lakh bribe intended to provide favorable treatment to KEC.
KEC is currently considering various options, including the possibility of legal action or appealing to Power Grid for a review of the decision. The company believes that this situation will not significantly affect its operations or financial standing, thanks to its robust order book and tender pipeline.
As a prominent player in the infrastructure sector, KEC International specializes in engineering, procurement, and construction across several segments, including power transmission and distribution, civil engineering, transportation, renewable energy, oil and gas pipelines, as well as cables and conductors.
In its latest financial report, KEC showcased a consolidated revenue growth of 19% year-over-year, reaching Rs 6,092 crore in Q2 FY26, along with an EBITDA of Rs 430 crore, which indicates an improvement in margin to 7.1% from 6.3%.
Point of View
KEC International's recent challenges highlight the complexities facing infrastructure companies in India. The bar imposed by Power Grid Corporation underscores the importance of adherence to contractual obligations. While the immediate impact on existing projects may be minimal, the situation calls for a thorough examination of corporate governance in the sector.
NationPress
19/11/2025
Frequently Asked Questions
Why did KEC International's shares drop?
KEC International's shares fell due to a nine-month ban imposed by Power Grid Corporation on new bids, following allegations of contractual breaches.
Will existing projects be affected?
No, the ban only concerns new bids, and ongoing projects with Power Grid will continue without disruption.
What actions is KEC considering?
KEC is reviewing its options, including possible legal action or appealing to Power Grid for reconsideration of the ban.
