L&T Share Price Falls Over 5 Per Cent As Stock Extends Losses For Second Straight Day - Know Why

L&T Share Price: Shares of Larsen & Toubro declined over 5 per cent to Rs 3,485.9 apiece on the NSE as the stock extended losses for the second straight day on June 13. The stock declined after the Mumbai Metropolitan Region Development Authority (MMRDA) urged the company to submit detailed financial estimates for a bid it had placed on June 12, according to a report by the Indian Express. Earlier the MMRDA had scrapped tenders cumulatively worth Rs 14,000 crore for two projects citing “larger public interest”.

The development follows legal proceedings before the Supreme Court. The civil construction company claimed before the apex court that its bids were lower than the lowest bidder by over Rs 3000 crore for both projects. Megha Engineering and Infrastructure Ltd (MEIL) emerged as the lowest bidder for the two projects. Notably, the bid estimates disclosed by L&T are likely to play a significant role in the new tender which the MMRDA is expected to initiate.

As per the report, the first project has an estimated cost of Rs 8,000 crore and is a 5-km twin tunnel which has a diameter of 14.6-meter. Once built the tunnel will link the region near the Mira-Bhayandar region close to the Vasai creek to the Fountain Hotel junction located in Thane. The other project for which the civil construction company placed a bid had an estimated cost of Rs 6,000 crore. The Rs 6000 crore project will provide connectivity between Bhayandar and Ghodbunder Road in Thane via a 9.8-km long elevated road bridge.

Earlier on May 20, the Bombay High Court had denied relief to L&T in a matter in which it had claimed that the MMRDA had opened financial bids for the two projects by excluding L&T. Following the refusal of relief, the company approached the Supreme Court and disclosed before the court that its bids were lower than other bidders. As per the report, the civil construction company had bid Rs. 5,554 crore for the road bridge and Rs. 6,498 crore for the twin tunnel project.

The MMRDA has now requested L&T to provide detailed financial estimates for the two projects within a period of seven days. Additionally, the civil construction company has also been asked to provide supporting calculation sheets or explanatory notes along with rate analysis and detailed justification.

L&T Share Price History

In the past one year shares of Larsen & Toubro have declined over 2 per cent on the NSE. On a year-to-date basis the stock has declined 0.64 per cent and in six months shares of the company fallen over 7 per cent. In a month the stock has traded lower by 0.18 per cent and in the last five days the stock has extended declines falling over 2 per cent.

At the time of writing this story shares of L&T traded at Rs 3,552.1 down by 1.44 per cent on the NSE.