SEPC Limited shareholders have approved the issuance of equity shares to the shareholders of Avenir International Engineers and Consultants LLC, Abu Dhabi, on a preferential basis for consideration other than cash by way of a swap of equity shares. The resolution, which enables the company to execute the strategic partnership without immediate cash outflow, passed with 98.97% assent on August 05, 2026, marking the conclusion of the postal ballot process initiated under Regulation 44 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Board of Directors had appointed Alagar & Associates LLP as the scrutinizer for the postal ballot notice dated July 06, 2026. The remote e-voting facility, managed by Central Depository Services (India) Limited (CDSL), was open from July 07, 2026, at 9:00 AM IST to August 05, 2026, at 5:00 PM IST. As per the scrutinizer’s report filed with the National Stock Exchange of India Limited and BSE Limited, all four resolutions sought were passed by the requisite majority. The cut-off date for determining eligible voters was July 03, 2026, with 3,22,792 shareholders on record.

Voting Results Summary

Shareholders voted on four key resolutions during the postal ballot period. While promoter group support was unanimous across all items, public non-institutional investors showed varying levels of dissent, particularly regarding the increase in borrowing limits.

Promoter vs. Public Voting Patterns

The detailed voting data reveals a distinct divergence between promoter and public institutional voting behavior. The Promoter and Promoter Group, holding 217,595,982 shares, voted 100% in favor of all four resolutions. Public institutions also supported the capital increase and the Avenir swap unanimously but opposed the increase in loan thresholds and borrowing limits.

For the resolution to increase the threshold of loans, guarantees, and investments under Section 186 of the Companies Act, 2013, public institutions voted against the proposal with 88.42% dissent, though the resolution passed due to promoter backing. Similarly, for the increase in the overall borrowing limit under Section 180(1)(C), public institutions dissented by 88.42%, while public non-institutions dissented by 43.24%. Despite this opposition from the public segment, the strong promoter support ensured the passage of these strategic financial flexibility measures.

What the Numbers Show

The overwhelming support for the Avenir International Engineers swap deal (98.97%) suggests shareholder confidence in the strategic value of this partnership, likely viewing the equity swap as a accretive or neutral transaction compared to cash dilution. However, the significant dissent from public institutions on borrowing limits (3.50% overall dissent, driven by 88.42% institutional dissent) indicates caution regarding leverage expansion. This split highlights a governance dynamic where promoters are driving aggressive financial structuring—increasing both borrowing capacity and loan thresholds—while institutional investors exercise restraint, potentially signaling concerns over debt levels or risk exposure despite approving the core strategic alliance.

Sepc has secured a confirmed work order valued at Rs 854.57 crore from Steel Authority of India Limited (SAIL). The contract covers the Pellet Plant Balance of Plant (BOP) including Civil and Structural works as part of the 4.08Mtpa Crude Steel Expansion Project at the IISCO Steel Plant (ISP), Burnpur. The execution timeline is set at 32 months, and the order was disclosed to exchanges on 04 August 2026. The company's market capitalisation currently stands at Rs 1100 crore.

Order Details and Financial Context

Sepc received a formal Letter of Award for this major order, with the scope covering comprehensive civil and structural engineering for the pellet plant package. This is a confirmed, executable contract rather than a preliminary selection or mobilisation notice. The Rs 854.57 crore order value is approximately 3.15 times the company's average quarterly revenue of Rs 271.45 crore. When combined with previous wins, Sepc's total disclosed order book stands at Rs 3444.74 crore, representing 12.69 quarters of average quarterly revenue — a substantial pipeline relative to current run rates. At this book-to-bill level, execution capacity, rather than order acquisition, becomes the primary constraint on near-term growth.

Company Order Track Record

Order inflow velocity has accelerated significantly in Q1FY27, with Rs 3444.74 crore secured in the April–June 2026 quarter alone. This surge is largely driven by multiple large packages from SAIL-ISP, alongside wins from MOIL Limited and Shalimar Corp Limited. The current order size is consistent with Sepc's recent track record of securing major infrastructure contracts exceeding Rs 500 crore.

Execution and Financial Performance

Revenue conversion remains steady, but margin quality has fluctuated. In Q4FY26, revenue stood at Rs 288.90 crore with an OPM of 3.58%, down from 8.17% in Q3FY26. Net profit also declined to Rs 13.70 crore in Q4FY26 from Rs 15.00 crore in the prior quarter. These fluctuations highlight execution variability despite consistent top-line delivery.

Revenue Growth — Order Wins Translating to Revenue

As Sepc has sustained and accelerated order wins, particularly in the capital goods and infrastructure sectors, its annual revenue has grown from Rs 646.00 crore in FY25 to Rs 1054.50 crore in FY26, representing a YoY growth of 63.2% based on the latest annual data. This confirms that past order inflows are effectively translating into top-line expansion.

Working Capital and Execution Capacity

The balance sheet shows a comfortable current ratio of 2.54x and a low Total Liabilities/Equity ratio of 0.61x, suggesting adequate liquidity to fund working capital requirements for the existing backlog. However, operating cashflow was negative at -Rs 132.50 crore in FY25, indicating that revenue recognition is not yet converting efficiently into cash. Monitoring receivables collection cycles remains important as the order book expands further.

What to Watch

• Execution rate: With 12.69 quarters of backlog, watch for acceleration in quarterly revenue run-rate vs total backlog to ensure capacity constraints do not delay deliveries.
• OPM trajectory: Monitor if OPM stabilises above 5% as new contracts execute, given the dip to 3.58% in Q4FY26.
• Client concentration: SAIL-ISP accounts for a dominant share of the disclosed order book; any delays or payment issues from this single client could impact cashflows significantly.
• Cash conversion: Negative operating cashflow in FY25 needs reversal to sustain growth without increasing leverage.

Key Observations

• Backlog signal: Book-to-bill of 12.69x. At this level, execution capacity becomes the binding constraint.
• Market cap context: With MCap at Rs 1100 crore, the disclosed order book of Rs 3444.74 crore is approximately 3.13x the company's current market capitalisation.
• Valuation check (as of 05 Aug 2026): P/E of 21.3x against ROCE of 4.38%. Valuation was pricing in execution improvement not yet visible in return ratios. (P/E is price-derived and will change; ROCE is from audited financials)
• Cash conversion: Operating cashflow of -Rs 132.50 crore in FY25; backlog is not converting to cash efficiently, and receivables or working capital cycle may be stretched.
• Promoter holding: Moved from 18.67% to 11.67% in Q1FY27, a 7 pp change.