RailTel Cancels ₹26.72 Crore South East Central Railway Contract Amid Rising OFC Prices

New Delhi, May 21, 2026: RailTel Corporation of India Ltd. , a Navratna PSU under the Ministry of Railways, has informed stock exchanges that the Letter of Acceptance (LOA) awarded by South East Central Railway (SECR) has been terminated. The decision comes after a sharp, war-induced escalation in raw material prices rendered the project financially unworkable.

The original order, valued at ₹26,72,60,140 (approximately ₹26.73 crore), was for the supply, laying, and termination of Optical Fibre Cable (OFC) , including trenching, HDPE pipe insertion, horizontal directional drilling, and related works.

Why Was the Contract Terminated?

In a regulatory filing dated May 21, 2026 (Ref No: RailTel/Sectt/21/SE/S-16), RailTel stated:

“Due to the prevailing war situation and the consequent steep increase in the prices of OFC, HDPE pipes and other materials, the project cost became unviable. Therefore, RailTel has decided not to execute the work under the said tender. Consequently, the customer has terminated the contract awarded to RailTel.”

The company had originally announced the receipt of this LOA on March 7, 2026, under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Exchange Intimation Details

Impact on RailTel’s Order Book

While the cancellation of a large-ticket order could raise concerns, RailTel has not indicated any immediate material impact on its overall financial health. The company has one of the largest telecom infrastructure footprints in India and continues to secure new projects across railway modernization, fiber network expansion, and government digital initiatives.

However, the development highlights the cascading effect of global geopolitical tensions on domestic infrastructure contracts, particularly those sensitive to commodity prices like optical fibre cables and HDPE pipes.

Official Filing Signatory

The disclosure was signed and submitted by:

J. S. Marwah
Company Secretary & Compliance Officer
Membership No.: FCS 8075

Market Context

The ongoing war situation has disrupted global supply chains for polymers (used in HDPE pipes) and glass preforms (used in OFC manufacturing), leading to cost overruns across multiple infrastructure sectors. RailTel’s decision to walk away rather than execute a loss-making contract is being viewed by analysts as a prudent financial move.

What This Means for Investors

• Regulatory Compliance: Full disclosure under SEBI LODR ensures transparency.

• Risk Assessment: Investors should monitor commodity price volatility affecting PSU order execution.

• Future Orders: RailTel continues to bid for new projects; this cancellation is an isolated event tied to external factors.