Teerth Gopicon Limited, a listed infrastructure company, has received a major regulatory and operational setback following the termination of a high-value contract by Madhya Pradesh Jal Nigam Maryadit (MPJNM). The termination, officially communicated through a letter dated 26th June 2025, pertains to the Garoli Multi-Village Water Supply Scheme in District Chhatarpur, Madhya Pradesh. The development has been disclosed by the company in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, supported by the SEBI circular issued on 13th July 2023.

The now-terminated project was a significant one, involving Engineering, Procurement, Construction (EPC), Testing, Commissioning, Trial Run, and Operation & Maintenance (O&M) of an integrated rural water supply scheme to be carried out over 10 years. Awarded via a Letter of Acceptance (LOA) dated 17th February 2023, the contract required the company to handle all major infrastructure components in a turnkey execution model.

However, the contract has now been cancelled due to non-submission of fresh e-bank guarantees, as cited in the official correspondence from the government body. This shortcoming on part of Teerth Gopicon Limited has prompted Madhya Pradesh Jal Nigam Maryadit to take stringent action, including reserving the right to initiate legal proceedings as permitted under applicable law.

Background and Scope of the Contract:

The Garoli Multi-Village Water Scheme aimed to deliver long-term sustainable drinking water access to various rural clusters in Chhatarpur, a backward and water-stressed district of Madhya Pradesh. The scheme included:

• Laying of pipelines and distribution systems

• Construction of pumping and treatment stations

• Trial runs of the complete system

• Comprehensive O&M over a 10-year period

Such turnkey contracts are increasingly used for rural development programs under central and state-funded water missions, including Jal Jeevan Mission. The cancellation thus holds operational and reputational implications for Teerth Gopicon.

Reason for Termination:

According to the company's disclosure, the contract was terminated solely due to non-submission of fresh electronic bank guarantees, a critical part of post-award compliance. Bank guarantees serve as financial assurance to the awarding authority in case of performance defaults. Failure to furnish these guarantees constitutes a material breach of contract, leading to immediate action.

Regulatory Disclosure & SEBI Compliance:

The company has provided full disclosure in the prescribed format in Annexure A, detailing:

• Parties to the contract: MP Jal Nigam & Teerth Gopicon Ltd.

• Nature of work: EPC + O&M of Garoli Water Scheme

• Contract date: 17.02.2023

• Reason for termination: Non-submission of fresh e-bank guarantees

• Possible impact: Subject to legal proceedings as may be initiated by MPJNM

This information has been made publicly available on the company’s website and also reported to the National Stock Exchange (NSE) under company symbol TGL.

Implications for Teerth Gopicon Limited:

While the financial magnitude of the terminated project is not explicitly stated in the disclosure, such multi-year rural infrastructure contracts typically range in tens to hundreds of crores. The termination, therefore, could have significant implications on the company’s order book, revenue recognition, and future bidding credibility, especially in public infrastructure tenders.

Moreover, the potential legal proceedings alluded to by MPJNM could further complicate matters, including the possibility of blacklisting, penalty impositions, or disqualifications from similar future tenders.

The termination also comes at a time when infrastructure companies are grappling with strict regulatory scrutiny, compliance costs, and tight liquidity conditions, particularly in public-private partnerships and turnkey EPC models.

Company’s Response:

Maheshbhai M. Kumbhani, Managing Director of Teerth Gopicon, has assured stakeholders that the company will keep the markets updated on further developments. No mention was made about any remedial or conciliatory steps being taken to possibly restore the contract, nor has any legal response been indicated at this stage.

Investor and Market Impact:

This development is likely to impact investor sentiment, particularly given the high dependency of infrastructure players on government contracts. Terminations such as this often lead to:

• Stock volatility in the short term

• Scrutiny over management practices and risk control

• Questions from institutional investors and auditors

The company’s ability to retain confidence will depend on its clarity in communication, future pipeline diversification, and how it manages regulatory fallouts from this incident.

About Teerth Gopicon Limited:

Teerth Gopicon Limited is involved in civil construction and infrastructure development, particularly in the water supply, roads, bridges, and EPC sectors. It was listed recently and has been aiming to establish a national footprint in turnkey projects under various government programs. The company trades on the National Stock Exchange under the symbol TGL.

Conclusion:

The termination of the Garoli Multi-Village Water Scheme contract is a serious compliance and operational issue for Teerth Gopicon Limited. It not only results in the loss of a long-term revenue stream but also places the company under potential litigation risks and regulatory red flags. The company’s next steps, including legal strategy and investor communication, will be crucial in mitigating the damage and regaining confidence among stakeholders.

The Upcoming IPOs in this week and coming weeks are Crizac, Silky Overseas, Vandan Foods, Pushpa Jewellers, Cedaar Textile, Marc Loire Fashions.

The Current active IPO are Neetu Yoshi, Adcounty Media India, Moving Media Entertainment, Valencia India, PRO FX Tech, Ace Alpha Tech, Indogulf Cropsciences, Suntech Infra Solutions, Rama Telecom, Supertech EV, Sambhav Steel Tubes, HDB Financials.

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst.