SEPC Secures ₹854.57 Crore Order from SAIL for Pellet Plant BOP Package

What Happened ?

SEPC Limited has received a Letter of Acceptance (LoA) from Steel Authority of India Limited (SAIL) – IISCO Steel Plant (ISP), Burnpur, for the execution of “Pellet Plant BOP including Civil & Structural (Pellet Package-2)” for the 4.08 MTPA Crude Steel Expansion Project. The total order value is ₹854.57 crore. The contract is to be executed within 32 months from the effective date (date of signing of Contract or 30 days from LoA, whichever is earlier).

key details

• Order Value: ₹854.57 crore (net of Input Tax Credit).
• Customer: Steel Authority of India Limited (SAIL) – IISCO Steel Plant (ISP), Burnpur.
• Scope: Pellet Plant BOP including Civil & Structural (Pellet Package-2).
• Project: 4.08 MTPA Crude Steel Expansion Project of SAIL-ISP Burnpur.
• Execution Timeline: 32 months from effective date of contract.
• Security Deposit: ₹47.58 crore (Performance Bank Guarantee).
• Entity Type: Domestic.
• Promoter Interest: None.

Note:

• The contract includes civil and structural work for the pellet plant balance of plant (BOP) package. The effective date of contract shall be the date of signing of Contract or 30 days from the date of Letter of Acceptance (LOA), whichever is earlier. The company is required to mobilize resources immediately on receipt of LoA.

Risk Analysis

Summary:

• While the order win strengthens SEPC’s order book, risks include execution within the 32-month timeline, project management, and commodity price volatility.

Key Risks:

• Execution within 32-month timeline with project management challenges.
• Raw material price volatility impacting project margins.
• Working capital management for large-scale EPC projects.
• Dependence on SAIL for timely clearances and payments.
• Competition in the steel sector EPC space.
• Regulatory and environmental clearances for the project.

Worst Case:

Delays in project execution or cost overruns could impact profitability and cash flows.

Risk Level: Medium