VA Tech Wabag Ltd.’s share price saw its steepest decline since March 17, 2020, after the Saudi Water Authority (SWA) cancelled a major 300 MLD sea water desalination plant order. This decision followed internal administrative procedures by the authority. The company is currently in discussions with the customer to understand the full reasons behind the cancellation.
On September 6, VA Tech Wabag had announced that the order was worth Rs 2,700 crore. The company’s strong track record and advanced technology had played a significant role in winning this prestigious order. The SWA currently oversees more than 40 desalination plants, producing over 11 million cubic meters of water per day, as well as 139 water purification stations that produce over 4 million cubic meters of water daily.
The company clarified that the order was cancelled because the Saudi authority wanted to “recalibrate” the project’s size and scope. A new tender for the desalination plant is expected to be floated in the next couple of weeks. Although VA Tech Wabag’s shares have recovered from the initial sharp decline, they are still down by around 9-10% as of mid-morning on December 18.
VA Tech Wabag has confirmed its intention to participate in the upcoming revised tender from the SWA. The company, which has been involved in water treatment projects in Saudi Arabia for over 40 years, had been counting on the cancelled order to help meet its target of a Rs 16,000 crore order book by the end of this fiscal year. As of the first half of FY25, its order book stood at Rs 14,500 crore.
