New Delhi: The National Highways Authority of India (NHAI) has debarred infrastructure major NCC Ltd and its step-down subsidiary OB Infrastructure Ltd from participating in its tender processes for two years. The order, effective February 17, 2026, bars the companies from bidding in any NHAI tender, whether as concessionaire, EPC contractor, O&M contractor, consortium partner or in any other capacity.
Following the development, NCC’s shares declined 1.77% to close at ₹149.45 on the BSE on Wednesday, reflecting investor concerns over future business prospects.
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Project at the centre of the dispute
The debarment relates to a BOT (Annuity) highway project in Uttar Pradesh covering the Orai–Bhognipur stretch of NH-25 and the Bhognipur–Barah stretch of NH-2 (new NH-27). The project involved design, engineering, construction, financing, operation and maintenance responsibilities.
The company has attributed delays to late land handover and procedural issues on the authority’s side, while NHAI has taken action citing alleged contractual non-compliance.
Arbitration and legal battle
OB Infrastructure had initiated arbitration proceedings against NHAI and secured an award in its favour in November 2024. NHAI has challenged that award before the Delhi High Court, where the matter remains sub judice.
Additional disputes related to project execution and maintenance are also ongoing. The company has contended that the debarment order was issued after the concession period ended and without granting an adequate opportunity for a hearing. It plans to challenge the order through legal remedies.
Business impact assessment
NCC has stated that the debarment will not affect its existing order book or ongoing projects. However, the inability to participate in new NHAI tenders for two years could impact future order inflows, depending on the volume of highway projects awarded during the period.
Given that NHAI is among the largest clients for road infrastructure companies, the restriction may weigh on growth visibility, particularly at a time when government spending on highways remains strong.
Stock performance and investor sentiment
NCC’s stock has declined about 31.25% over the past six months and delivered a negative return of roughly 19.12% over one year. The company’s market capitalisation stands at around ₹9,350 crore. The presence of noted investor Rekha Jhunjhunwala in the shareholding keeps the stock under close market watch.
Analysts believe the immediate financial impact may be limited, but the debarment introduces uncertainty around medium-term order inflows and revenue growth.
What to watch next
Market participants will track two key developments: the outcome of the company’s legal challenge and its ability to secure orders from alternative clients and segments to offset the NHAI restriction.
The episode underscores the importance of contractual compliance and dispute resolution in the infrastructure sector, where project delays and litigation can materially affect growth prospects and investor confidence.
About the author — Suvedita Nath is a science student with a growing interest in cybercrime and digital safety. She writes on online activity, cyber threats, and technology-driven risks. Her work focuses on clarity, accuracy, and public awareness.
