PNC Infratech dropped to an intraday low of Rs 241.60 on Thursday after NHAI issued show-cause notices over Kanpur-Lucknow Expressway damage.

Here’s what triggered the fall. NHAI found that a nearly 300 metre stretch of the expressway, built and maintained by PNC Infratech’s subsidiary Awadh Expressway, slipped after heavy and continuous rain.

That’s less than 0.5% of the entire expressway length, but it was enough for the highway authority to step in. NHAI suspended toll collection on the affected corridor and said it would recover the lost toll revenue from the company until repairs are complete.

The notices don’t stop there. NHAI has proposed a penalty equal to 2% of the performance security and started proceedings against specific technical staff, who could face a three year ban if found responsible.

There were also reports that NHAI tagged the company as a non-performer, something that would make it ineligible to bid for future projects if it holds up. PNC Infratech has pushed back on that particular point.

In its filing to the exchanges, the company said it has not been declared a non-performer or debarred by NHAI, and that it is submitting formal replies to the notices.

It added that most of the damaged stretch has already been repaired, with the rest underway, and that repair costs were already accounted for in its routine maintenance budget.

The company said the issue has no material impact on its ability to continue operating or bidding for new contracts. Repair costs are estimated at around Rs 3 crore.

As of around 12:00 pm on Thursday, PNC Infratech shares were trading at Rs 242.20 on the NSE, down 4.85% for the day. The stock has now fallen close to 21% over the past year.

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