SYNOPSIS: This EPC contractor signed an MRA to restructure Rs. 1,516 crore debt into debentures, with equity conversions and lender oversight, aiming to strengthen its financial position without fresh funding under RBI guidelines.
During Friday’s trading session, shares of an EPC contractor of road construction, mining and irrigation hit a 5 percent upper circuit on BSE, after the company executed a Master Restructuring Agreement (MRA) with lenders as part of its debt restructuring plan in relation to debt aggregating to Rs. 1,516 crores.
With a market cap of Rs. 139 crores, shares of Sadbhav Engineering Limited were trading at Rs. 8.1 on BSE, compared to its previous closing price of Rs. 8.17. The stock has delivered negative returns of over 26 percent in one year, and has fallen by nearly 25 percent in the last one month.
What’s the News
As per the latest disclosures with the stock exchanges, Sadbhav Engineering Limited has entered into a Master Restructuring Agreement (MRA) with a majority of its consortium lenders as part of its debt restructuring plan.
The agreement was executed on 25th March 2026 between the company, IDBI Trusteeship Services Limited (acting as both security trustee and debenture trustee), and key lenders including Punjab National Bank, Union Bank of India, Axis Bank, Asset Care & Reconstruction Enterprise Limited, Yes Bank, and Bank of India. The framework also allows additional lenders to join the agreement at a later stage.
The MRA formalises the terms of the restructuring plan, which has been prepared in line with the Reserve Bank of India’s stressed asset resolution framework, and outlines the conditions required for its implementation.
The restructuring covers a total debt exposure of Rs. 1,516.71 crore, comprising Rs. 906.35 crore of fund-based exposure and Rs. 610.36 crore of non-fund-based limits. Under the plan, the fund-based debt will be converted into convertible debentures, while no fresh funding or additional loans will be introduced. Existing security provided to lenders will continue to back these debentures.
As part of the agreement, lenders will have the right to appoint nominee directors on the company’s board, strengthening oversight. Additionally, a portion of the interest on the proposed debentures is planned to be converted into equity, subject to regulatory norms. The restructuring also includes provisions requiring the conversion of both existing and additional promoter debt into equity, further aligning promoter interests with the company’s financial restructuring. The conversion of interest and promoter debt into equity will be carried out in accordance with RBI guidelines and SEBI regulations, including pricing norms.
While the MRA is not a standalone loan agreement, it effectively restructures multiple existing loan facilities of the company. These facilities trace back to agreements entered into from March 2008 onwards, along with several subsequent amendments and supplemental agreements over the years.
Financials & More
The company reported a marginal decline in revenue from operations, experiencing a year-on-year decrease of over 4 percent, from Rs. 240 crores in Q3 FY25 to Rs. 230 crores in Q3 FY26. Meanwhile, its net losses widened by around 437 percent YoY from Rs. 16 crores to Rs. 86 crores over the same period, indicating continued pressure on profitability.
Sadbhav Engineering Limited is engaged in the business of development of infrastructure facilities in areas of canals, irrigations projects, roads, bridge, mining activities on contract basis, dams which includes civil, electrical and mechanical contractor, designer and engineers, structural contractor, earthwork contractor for repairing, reconstruction, renovation, demolitions and construction of canals, irrigations projects, roads, bridge, dams.
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