KEC International shares down 7% after nine-month exclusion from Power Grid tenders, contracts

Shares of KEC International Ltd. declined over 7% on Wednesday, November 19, after the company said it has been barred by Power Grid Corporation of India Ltd. from tenders issued by the state-run company for nine months.

KEC International received a letter from Power Grid Corp on Tuesday informing it that the company has been excluded from participating in the tenders and from receiving contract awards for nine months, starting November 18.

Power Grid Corp's action is related to an alleged transgression of contractual provisions tied to a matter that was previously communicated to the exchanges on March 24 this year. It said the restriction would not affect any of the existing Power Grid Corp projects that are currently under execution.

KEC International informed the exchanges on Tuesday that it is examining various options, including legal recourse and approaching Power Grid Corp to reconsider its decision. It also said it does not anticipate any significant impact on its operations or financial position, citing a strong order book and a healthy tender pipeline.

KEC International added that it upholds the highest standards of corporate governance, ethics and compliance and conducts its business with integrity, transparency and adherence to applicable laws and regulations.

In an interaction with CNBC-TV18 on November 11, KEC International had maintained its 15% growth guidance for the full financial year, adding that it also sees an advantage of declining steel prices.

Shares of KEC International were down 7% at ₹726.45 apiece just after market open on Wednesday. The stock has declined 14.8% in the past month and 39.5% this year, so far.

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