Afcons shares drop over 4%, hit 52-week low on termination of contract worth 113.03 million euros

Shares of Afcons Infrastructure, the Shapoorji Pallonji group company, dropped as much as 4.4% to hit an intraday low of ₹294.50 on the National Stock Exchange (NSE) on Wednesday, February 25.

The company post market hours on Tuesday informed exchanges that one of its clients has cancelled a contract valued at 113 million euros.

On the BSE, Afcons shares dropped as much as 4.2% to hit a fresh 52-week low of ₹294.65.

Afcons said that Société Autoroutiere Du Gabon (SAG) has issued a notice of termination for an engineering, procurement, and construction (EPC) contract for the design, construction, rehabilitation, and upgradation of National Road NR1 from PK 24+000 to PK 105+000 (approximately 117 km) of contract value of approx. 113.03 million euros.

"The major portions of the project (approx. 93.47% as on 31st December 2025) has been completed and opened to traffic nearly two years back. Certain balance portions are awaiting land handover," Afcons said.

Afcons added that its believes that the termination by the client is inconsistent with the contractual terms and applicable law.

"The Company continues to pursue its contractual and legal remedies. The dispute is project specific and does not impact the Company’s overall order book, operational capability, or business outlook. The termination is not expected to have any material adverse impact on the Company’s ongoing operations, or execution of other projects," Afcons added in a regulatory filing.

Afcons had in January informed exchanges that differences rose between the company and SAG with respect to certification of certain balance works and release of corresponding payments.

"In accordance with the dispute resolution mechanism under the contract, the Company has initiated arbitration proceedings under the rules of the International Chamber of Commerce (ICC) towards delays and additional costs incurred during execution. The matter is currently under arbitration and is sub judice," Afcons had said in January's regulatory filing.

SAG, an investment arm of Meridiam (France), was awarded a 30-year public-private partnership concession by the Republic of Gabon for rehabilitation, construction, financing, and operation of the Transgabonaise national road.

SAG awarded an EPC contract to Afcons for the design, construction, rehabilitation, and upgradation of National Road NR1.

Meanwhile, Afcons shares were witnessing higher than usual trading activity as trading volume spiked by 3 times to 7.92 lakh shares compared with an average trading volume of 2.47 lakh shares.

On the BSE, as many as 38,000 shares changed hands compared with an average of 26,000 shares traded daily in the past two weeks.

As of 12:04 pm, Afcons shares declined 2.2% to ₹301, underperforming the NIFTY Smallcap 100 index which was up 1%.