SEPC Limited's Trade Receivables Attached ₹154.63 Crore; PwC Tapped for Audit

SEPC Limited's trade receivables amounting to ₹154.63 crore have been placed under interim attachment by the Hon'ble High Court of Madras. PriceWaterHouseCoopers (PwC) has been appointed as an independent auditor to conduct a detailed examination of the company's affairs, assets, and liabilities.

Reader Takeaway: Court attachment tightens cash flow visibility; PwC audit aims for financial transparency.

What just happened (today’s filing)

The Madras High Court, in its order dated February 19, 2026, has mandated an interim attachment of ₹154.63 crore out of SEPC Limited's total trade receivables of ₹449.62 crore. This action is part of the court's efforts to enforce a foreign arbitral award previously deemed enforceable.

Furthermore, the court has appointed PriceWaterHouseCoopers (PwC) to conduct a thorough audit of SEPC Limited's (formerly Shriram EPC Limited) financial standing, assets, and liabilities. The audit is scheduled to submit its report by March 23, 2026.

Why this matters

This court-ordered attachment of a significant portion of receivables could potentially impact SEPC Limited's operational cash flows. The appointment of an independent auditor aims to provide the court with a clear picture of the company's financial health, crucial for safeguarding the interests of the award holder.

The court's intervention underscores the ongoing legal battle related to the foreign arbitral award, highlighting the judicial process to ensure compliance and asset security.

The backstory (grounded)

SEPC Limited (formerly Shriram EPC Limited) is an established player in the Engineering, Procurement, and Construction (EPC) sector, offering solutions across infrastructure, industrial, mining, and power segments.

The company has been navigating the enforcement of a foreign arbitral award. The Supreme Court had previously directed SEPC to deposit Rs. 125 crore with interest, and award holders were permitted to withdraw ₹39.50 crore. This current attachment of ₹154.63 crore represents the remaining amount due and payable.

Auditors have previously raised flags regarding the recoverability of SEPC's contract assets and trade receivables, pointing to stalled projects and the uncertainty surrounding the utilization of deferred tax assets.

What changes now

• A significant portion of SEPC's trade receivables are now under court-ordered interim attachment, restricting their immediate use.
• An independent audit by PwC will scrutinize the company's complete financial position, assets, and liabilities.
• The court seeks to ascertain the true financial state of SEPC to protect the award holder's rights.
• The company must cooperate with the auditor, and its operations will be under closer judicial review.

Risks to watch

• Legal Overhang: The ongoing enforcement of the foreign arbitral award continues to pose a significant legal risk, potentially leading to further judicial actions.
• Operational Impact: While the court stated operations would not halt, the attachment of receivables could still create liquidity challenges for day-to-day operations and project execution.
• Audit Findings: The findings of the PwC audit report are critical. Negative findings could lead to further court directives, impacting the company's financial structure and future prospects.

Peer comparison

SEPC operates in the competitive EPC sector, alongside larger entities like Larsen & Toubro (L&T), Tata Projects, HCC, and Afcons Infrastructure. These peers are typically involved in large-scale infrastructure projects and possess greater financial depth, often benefiting from diversified revenue streams and robust balance sheets.

Context metrics (time-bound)

• Interim attachment of trade receivables: ₹154.63 crore (as of February 19, 2026 order).
• Total trade receivables: ₹449.62 crore (as per court records).
• Amount deposited by Supreme Court: ₹125 crore (plus interest).
• Amount withdrawn by petitioners: ₹39.50 crore (plus interest) (August 2025).

What to track next

• PwC Audit Report: The submission of the detailed audit report by March 23, 2026, will be a key trigger.
• Court's Next Steps: The High Court's directives following the review of the audit findings will dictate the future course of action.
• Company's Financial Disclosure: Any updates from SEPC on its operational status and liquidity management amidst the attachment.
• Award Holder's Actions: The award holder's subsequent legal moves based on the audit and court orders.