Shares of Va Tech Wabag (Wabag), a leading water technology company, tumbled 11.18 per cent on Tuesday to close at ₹1,672.95 on the BSE after the company announced cancellation of a ₹2,700 crore order for a 300 million litres per day (MLD) mega seawater desalination plant in Saudi Arabia.
In a regulatory filing, the company stated that its September 6, 2024 intimation regarding the project was updated on December 16, 2024, when the customer notified all tender participants that the tender had been cancelled due to internal administrative procedures. Wabag added that it is engaging with the customer to understand the reasons for the cancellation in greater detail.
The Chennai-based Wabag had previously announced securing the $317 million (₹2,700 crore) order from the Saudi Water Authority (SWA). The project involved engineering, procurement, construction and commissioning (EPCC) of a 300 MLD seawater reverse osmosis (SWRO) desalination plant at a greenfield site in Yanbu, along Saudi Arabia’s west coast.
Wabag has a long-standing presence in Saudi Arabia, with over 40 years of experience in building water and wastewater treatment plants in the region.
The SWA, formerly known as the Saline Water Conversion Corporation (SWCC), operates more than 40 desalination plants that produce over 11 million cubic meters of water daily. It also manages 139 ground and surface water purification stations, which contribute an additional 4 million cubic meters of water per day.
According to SBI Securities, the development is negative in short to medium term for the stock.
