Shares of infrastructure developer Ashoka Buildcon witnessed a sharp decline of 6% during Friday's trading session following significant regulatory action by the National Highways Authority of India.
NHAI Takes Strict Action
The National Highways Authority of India has temporarily barred Ashoka Buildcon from participating in current and future bids for a period of one month. This suspension will remain effective until an Expert Committee completes its investigation into a recent incident involving the collapse of two precast PSC girders.
The incident occurred on the six-lane elevated corridor project stretching from Aroor to Thuravoor Thekku, which forms part of the crucial NH-66 highway network. One of the falling girders struck a commercial vehicle, resulting in the tragic death of the driver.
Company's Response and Investigation
Ashoka Buildcon confirmed receiving a show-cause notice from NHAI on Wednesday, November 26. In its official response filed with stock exchanges on Thursday, the company strongly refuted allegations of compromised public safety.
According to the company's statement, the incident resulted from sudden and unexpected circumstances that cannot be attributed to any failure in their established safety protocols. The infrastructure firm explained that a sudden malfunction of a hydraulic jack, caused by damage to an internal seal, led to the girder collapse.
The company emphasized that the goods vehicle involved had entered an area clearly marked as a prohibited construction zone. Ashoka Buildcon maintains that it has consistently enforced all safety measures and protocols in line with industry standards, contractual obligations, and relevant safety regulations.
Market Impact and Future Implications
The immediate market reaction saw Ashoka Buildcon shares dropping significantly by 6% as investors reacted to the news of the bidding suspension. The one-month suspension from NHAI bids could potentially affect the company's pipeline of future projects during this period.
While the investigation continues, the company has positioned itself to cooperate fully with the Expert Committee while maintaining its stance that the incident was caused by equipment failure rather than systematic safety lapses. The outcome of this investigation will be crucial in determining when Ashoka Buildcon can resume normal bidding activities with NHAI.
