Vishnu Prakash R Punglia Limited has received a credit rating downgrade from CARE Ratings Limited, with its bank facilities being revised from CARE BBB- Stable to CARE BB+ Negative. The rating action affects facilities totaling ₹960.00 crore and reflects concerns over the company's deteriorating financial performance and stretched liquidity position.

Rating Revision Details

CARE Ratings Limited has downgraded VPRPL's credit ratings across its banking facilities, citing significant operational challenges and financial performance deterioration during the nine-month period ended December 31, 2025.

The outlook has been revised from 'Stable' to 'Negative', indicating CARE Ratings' expectation of continued subdued performance in the near term due to high working capital intensity and potential further impact on debt coverage indicators.

Financial Performance Deterioration

VPRPL's operational performance has shown significant decline during 9MFY26, with the company reporting substantial moderation in scale and profitability. The engineering, procurement and construction (EPC) revenue declined to ₹749.57 crore in 9MFY26 from ₹832.36 crore in 9MFY25.

The company reported an operating loss in Q3FY26 due to lower absorption of fixed costs, subdued gross margin, and provisioning for expected credit loss of ₹17.00 crore. This resulted in a cash loss of ₹31.00 crore in Q3FY26, significantly impacting liquidity.

Working Capital and Liquidity Challenges

Working capital intensity continues to be a major concern for VPRPL, with the construction segment's inherent capital requirements being exacerbated by delays in work certification and payment releases from government authorities. The company's working capital cycle has elongated significantly:

• Gross Current Assets (GCA) days: 510 days in FY25 vs 204 days in FY23
• Working Capital Cycle: 323 days in FY25 vs 104 days in FY23
• Fund-based limits utilization: Over 90% in 12-months ended December 2025
• Non-fund-based limits utilization: 71% as on January 15, 2026

The company faces monthly scheduled repayments of ₹5.00 crore against the backdrop of operating losses, resulting in stretched liquidity conditions.

Orderbook Strength and Business Diversification

Despite operational challenges, VPRPL maintains a robust orderbook position that provides medium-term revenue visibility. The company had an outstanding orderbook of ₹5,000.00 crore as of September 30, 2025, representing healthy revenue visibility of 4x FY25 total operating income.

Geographic Distribution:

• Rajasthan: 48%
• Uttarakhand: 16%
• Uttar Pradesh: 9%
• Madhya Pradesh: 7%
• Other states: 20%

The majority of orders are from government entities with low counterparty credit risk, though timely fund allocation and release remain crucial for project execution.

Key Rating Concerns and Outlook

The rating agency has highlighted several factors constraining VPRPL's credit profile, including execution risks associated with projects at nascent stages and the company's presence in a highly competitive construction industry. Approximately 15% of the orderbook pertains to recently awarded projects at early execution stages, while another 23% comprises slow-moving orders due to land unavailability and design finalization delays.

Additional concerns include the termination of a railway contract worth ₹160.00 crore, resulting in forfeiture of bank guarantee and security deposit of ₹8.87 crore, with the company booking a loss of ₹9.96 crore in Q3FY26. The matter is currently sub-judice under the High Court.

The negative outlook reflects expectations of continued subdued performance due to high working capital intensity, which may further impact debt coverage indicators and liquidity profile in the near term.

Source: None/Company/INE0AE001013/05502eaa-b5df-4abb-8c31-d99fee8ef2d2.pdf

Vishnu Prakash R Punglia Limited has disclosed receiving an adjudication order from the Securities and Exchange Board of India (SEBI) dated February 24, 2026, which imposes a monetary penalty for disclosure regulation violations. The company informed stock exchanges about this development as part of its regulatory compliance obligations under SEBI's listing requirements.

SEBI Penalty Details

The adjudication order, bearing reference number Order/SM/SM/2025-26/32149, imposes a penalty under Section 15A(b) of the SEBI Act 1992. The financial implications of this regulatory action are outlined in the following table:

Nature of Violations

SEBI found the company guilty of two specific disclosure violations related to material events and their subsequent developments:

Primary Violation: The company failed to disclose within the stipulated timeframe an action taken by the Public Health Engineering Department, Government of Rajasthan, through its order dated June 22, 2024. This delay violated Regulation 30(2) read with Part A, Para A, Sub-Para 20 of Schedule III and Regulation 4(1)(d) of the LODR Regulations.

Secondary Violation: Updates regarding litigation initiated by the company before the Rajasthan High Court were also disclosed beyond the required timeframe. These updates included the grant of stay on the June 22, 2024 order and its subsequent quashing, violating multiple provisions of the LODR Regulations.

Regulatory Framework Violated

The violations encompassed several key regulatory provisions:

• Regulation 30(3) read with Regulation 30(4)(i)(c) of LODR Regulations
• Part A of Schedule III of the LODR Regulations
• Para B Sub-Para 8 of Schedule III
• Regulation 4(1)(d) of LODR Regulations

Company's Response

Vishnu Prakash R Punglia Limited has indicated that it is presently evaluating the findings contained in the SEBI adjudication order. The company stated it will adopt an appropriate recourse under law, suggesting potential legal challenges to the regulatory decision.

The disclosure was made to both BSE Limited and National Stock Exchange of India Limited on February 25, 2026, through the company secretary Nitisha Jain, ensuring compliance with ongoing regulatory obligations despite the penalty imposed.