CG Power and Industrial Solutions took another beating on Friday. Shares of the industrial equipment manufacturer slid 7% to ₹753 in Mumbai trade, extending a 5% drop logged during the previous session. That pushed two-day losses to a steep 10%. Selling pressure mounted early and never let up. The tumble has erased 17% of the company's equity value over the past month alone, squeezing its year-to-date advance down to 18%.
The sell-off began Thursday after state environmental regulators cracked down on the company's key manufacturing hub. In a regulatory exchange filing, CG Power disclosed that the Maharashtra Pollution Control Board ordered an immediate shutdown of manufacturing operations at its MIDC facility in Chhatrapati Sambhajinagar. The statutory board issued the closure directive under provisions of the Water (Prevention and Control of Pollution) Act, 1974, and the Air (Prevention and Control of Pollution) Act, 1981.
The board gave no leeway. Management acknowledged the regulatory order in its filing to stock exchanges, stating that the company remains committed to environmental compliance and is reviewing the legal directions to decide its course of action. Yet the immediate fallout remains unquantified. The company stated that the total financial impact of halting production at the Chhatrapati Sambhajinagar facility cannot be ascertained at this stage.
Then came the secondary shock from overseas markets. CG Power supplies specialized electrical infrastructure and heavy hardware feeding global data center buildouts. Those hyperscale buildouts suddenly face political headwinds abroad. A sweeping victory by the Democratic Party in the US midterm congressional elections triggered an aggressive global unwind across artificial intelligence and computing infrastructure plays on Thursday and Friday. Investors dumped suppliers on growing worries that incoming legislative scrutiny could slow massive data center development pipelines.
The cross-border contagion was immediate. When foreign bourses dumped computing and electrical equipment hardware suppliers, domestic market participants unloaded CG Power to derisk exposure. The combination of an abrupt domestic production freeze and a macro-level sector derating caught institutional desks off balance.
Capital goods and defense peers also witnessed spillover selling during Friday's trading, leaving industrial counters broadly subdued. CG Power management has not yet filed an update on legal remedies or an appeal before the appellate authority against the pollution control board's closure directive. Market participants are watching whether the engineering major can secure an administrative stay or fast-track an audit clearance to restart its factory lines.