The shares of this construction company were in the news today following the sudden drop in its share price, which was 23%. Let us see what the reason is for this sharp fall in share price.
The shares of this company, which is involved in engineering and construction of infrastructure projects such as dams, tunnels, bridges, hydro, nuclear, and more, had its share in the news after the shares tumbled today.
With a market cap of Rs 5,359 crore, the shares of Hindustan Construction Company Ltd crashed 23 per cent, reaching a low of Rs 20 in today’s trading session when compared to its previous day’s closing price of Rs 25.85. The shares have given a return of 213% over the last 5 years.
About the sudden price crash
HCC’s stock tumbled today largely because it turned ex-rights ahead of its Rs 1,000-crore rights issue. The company is bringing almost 80 crore new shares at Rs 12.50 each, which is a heavy discount to where the stock was trading. Once a stock goes ex-rights, investors no longer receive the benefit of those discounted shares, so the price automatically adjusts lower to reflect the dilution. In HCC’s case, the discount was so steep that the adjustment became much more dramatic, leading to a wave of selling.
The worry around big equity dilution made the fall even sharper. With such a large number of new shares set to enter the market, investors expect their existing stake to lose value unless the company’s operations pick up strongly. Many short-term traders who bought the stock only to be eligible for the rights issue also exited after the record date, which added further pressure. This kind of post-record date selling is common, but the deep discount attached to HCC’s rights issue amplified the reaction.
At the same time, HCC’s recent business performance hasn’t been very encouraging, with weaker sales in the latest quarter. That makes investors more cautious when a dilution event comes along. When soft financials meet a heavily discounted rights issue, the market usually pulls back until there is more clarity on growth. Today’s steep fall, therefore, might reflect both the technical impact of the ex-rights adjustment and the ongoing concerns about the company’s near-term momentum.
Financials and more
The revenue from operations stands at Rs 1,407 crore in Q2 FY25 and Rs 961 crore in Q2 FY26, showcasing a YoY fall of 32%. Along with the sales, the profits also fell from Rs 64 crore in Q2 FY25 to Rs 48 crore in Q2 FY26, tumbling 25%.
HCC’s Rs 13,152 crore order book shows that the company has a strong pipeline of work lined up, giving it clear revenue visibility ahead. Most of the orders come from the transportation sector, contributing 63%; the hydro segment contributes 22%, another 12% comes from water projects, and the remaining 3% from nuclear and buildings. Overall, the mix feels balanced and steady, showing that HCC is not relying on just one segment but building across multiple long-term infrastructure themes.
HCC is one of India’s oldest infrastructure builders, carrying nearly a century of experience in shaping the country’s backbone. Over the years, the company has worked on some of the nation’s most complex and high-impact projects, whether it’s highways and bridges, metro corridors, dams, tunnels, or even nuclear facilities. Its expertise spans almost every major infrastructure segment, including water systems and large industrial or institutional buildings. With this wide skill set and long history of execution, HCC has built a reputation for taking on technically demanding projects and continues to play a meaningful role in India’s growth story.
Written by Leon Mendonca
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
The post Why did Hindustan Construction Company shares crash 23% today? Check the reason appeared first on Trade Brains.