Penny stock under Rs 50 & Rs 16,285.4 crore order book: Patel Engineering Ltd agrees to settle US lawsuit for approx. USD 5 million

On Wednesday, shares of Patel Engineering Ltd gained 1.25 per cent to Rs 37.14 per share from its previous closing of Rs 36.68 per share. The stock’s 52-week high is Rs 59.50 per share while its 52-week low is Rs 33.65 per share. The company has a market cap of over Rs 3,100 crore and the stock is up by 10.4 per cent from its 52-week low of Rs 33.65 per share.

Patel Engineering Ltd. (PEL) has announced an in-principle agreement to settle a long-running lawsuit filed by Continental Casualty Company and Western Surety Company in the United States District Court for the District of Colorado. The litigation, which also named Patel Engineering, Inc. (PEI) as a defendant, stemmed from claims related to payment and other sureties issued by the Plaintiffs on behalf of a former PEL subsidiary, ASI Constructors Inc. (ASI). Following the closure of ASI's business in 2017, the Plaintiffs incurred significant costs, leading them to file the 2019 lawsuit. The claim initially targeted the signatories of an indemnity agreement, but PEL and PEI were later arrayed as defendants in 2020, with the Plaintiffs asserting a total liability, including interest and costs, that had escalated to approximately USD 40 million (about Rs 331 crore). Despite the Company's confidence, based on legal advice, that an adverse order against them was unlikely due to their non-participation in the indemnity agreement, the Settling Parties opted for a resolution to avoid the high costs and administrative burden associated with protracted U.S. litigation.

The in-principle settlement, which was notified to the District Court on October 13, 2025, proposes a payment of approximately USD 5 million (about Rs 44 crore) from PEL towards the full and final resolution of the Plaintiffs' claims against PEL and PEI. This payment will be subject to a long-term payment schedule and the fulfilment of non-monetary terms yet to be fully agreed upon. The Company has stated that the settlement amount, which represents a significant reduction from the claimed liability, will be provided for in its financial statements for the quarter ending September 30, 2025. PEL intends to meet this obligation through internal accruals across various tranches, asserting that the payment will not materially affect the Company's liquidity or impact its core business operations. The finalisation of the settlement remains contingent upon the parties agreeing on the non-monetary conditions and executing a formal written settlement agreement.

About the Company

Patel Engineering Limited is a 76-year-old company established in the year 1949 and has evolved as a Construction company specialising in the hydropower and irrigation segments. It is engaged in the construction of dams, bridges, tunnels, roads, piling works, industrial structures and other kinds of heavy civil engineering works and have executed a variety of infrastructure projects in the technology-intensive areas like hydropower, irrigation and water supply, urban infrastructure and transportation segments especially in tunnels and underground works for hydroelectric and transportation projects primarily as civil contractors.

Order Book: As of June 30, 2025, the company’s order book stands at Rs 16,285.40 crore (Including L1 Orders). Segment-wise order book includes hydroelectric (61.46 per cent), irrigation (19.67 per cent), tunnel (7.17 per cent, road (1.89 per cent) and other (9.81 per cent). 

Disclaimer: The article is for informational purposes only and not investment advice.