The share price of NCC came under heavy selling pressure in the early trading session today, February 19, dragging the stock to down to hit a 52-week low. The sharp decline in the stock price was due to the regulatory action by the National Highways Authority of India (NHAI) against the company and one of its subsidiaries.
During intraday trade, NCC shares fell as much as 10% before trimming some losses later in the session. The stock dropped nearly 10% to Rs 135 per share.
At the time of writing, the company’s share price had partially recovered from the day’s bottom. Let’s take a look at the key reasons behind this steep fall –
NHAI debars step-down subsidiary
The key reason behind this sharp plunge in the share price of the company was an order issued by NHAI debarring NCC and its step-down subsidiary, O B Infrastructure (OBIL), from participating in future tenders for two years. The order come into effect from February 17, 2026.
In a regulatory filing, the company stated, “NHAI, vide its communication dated 17th February 2026, has issued an order of debarment to the Concessionaire i.e., O B Infrastructure Limited (OBIL) (step-down Subsidiary) and Promoter of the Concessionaire i.e., NCC Limited restraining them from participating in any tender/bid/RFP issued by NHAI, whether acting as Concessionaire, Contractor, EPC Contractor, O&M Contractor, O&M Agency, or Consortium Member, for a period of two (2) years with effect from 17th February 2026.”
This effectively means that for two years, NCC and OBIL will not be eligible to bid for projects floated by NHAI. Since highway projects form an important part of infrastructure companies’ growth pipelines, the restriction has raised concerns about order inflows during the debarment period.
Dispute over Uttar Pradesh highway project
The debarment is linked to a long-running dispute over the Orai-Bhognipur section of National Highway 25 in Uttar Pradesh. The project was executed by OBIL under a concession agreement signed in April 2006 on a Build-Operate-Transfer (Annuity) basis.
According to NCC, the delays in the project were caused by NHAI’s failure to hand over land on time and other contractual issues.
The company in the regulatory filing added that OBIL initiated arbitration proceedings against NHAI. It also has received a favourable award in November 2024.
However, NHAI challenged the award in the Delhi High Court, where the matter is currently pending.
The company also noted that additional disputes related to the same project are under arbitration. OBIL has argued that the debarment was initiated while arbitration proceedings are ongoing and after the concession period had already ended.
Moreover, the company in the exchange filing added that it was not given an opportunity to be heard and plans to challenge the order as per applicable law.
Concerns over future order inflows
While NCC clarified that the debarment does not impact its existing projects or current order book, the restriction could affect future opportunities linked specifically to NHAI.
The company said there is no financial or operational impact on ongoing projects.
NCC in the exchange filing also noted “The impact, if any, on future tenders will depend on business opportunities arising during the debarment period. At present, no quantifiable financial impact can be ascertained.”