JSPL shares continue to suffer post SC coal verdict

Shares of Jindal Steel and Power slumped over 6 per cent today, extending their downfall for the second straight session, on concerns over potential delays following Supreme Court's judgement on coal block allocations made since 1993 till 2010.
JSPL's stock plunged 6.16 per cent to settle at Rs 237.55 on the BSE. During the day, it tumbled 8.21 per cent to Rs 232.35. At the NSE, it fell by 6.19 per cent to close at Rs 237.75.
In the previous session, the stock had crashed 13.97 per cent.
"Jindal Steel and Power is the worst affected player. It (Supreme Court judgement) will delay the process of securing mining rights for its Utkal B1 mine, critical for its Angul steel cum power project," brokerage firm Prabhudas Lilladher Private Ltd said in a report.

Barclays also said for JSPL, the SC ruling not only creates "uncertainty on profitability" from existing operational coal blocks (Gare Palma IV/I /2/3) but also on the profitability of the USD 2.6 billion investment in the Angul project as the associated Utkal B1 block is "unlikely" to be allocated now.
Jindal Steel and Power, which is operating two coal mines in Chattisgarh among eight allocated between 1993 and 2010, yesterday said it is "evaluating the Supreme Court judgement" on coal block allocation and "the implications for JSPL".

"We are not in a position to comment as we are currently evaluating the Supreme Court judgement and the implications for JSPL," the company had said.

JSPL is operating two mines in Chhattisgarh having a little over 12 million tonnes a year production capacity now. These are for JSPL's Raigarh steel plant and Tanmar Power plant.
JSPL has also been allocated Utkal B1 mine in Odisha for use in Angul, one mine in Chhattisgarh for Raigarh steel unit and Jitpur mine in Jharkhand for its captive power plant at Godda.
Meanwhile, other metal stocks saw value buying. Tata Steel, Hindalco and Sesa Sterlite recovered.
Shares of Hindalco gained 3.64 per cent, Tata Steel rose by 2.57 per cent and Sesa Sterlite was up 0.36 per cent on the BSE. Among others, JSW Steel rose by 1.02 per cent, Hindustan Zinc (1.31 per cent) and SAIL (1.54 per cent).

All these stocks had witnessed selling yesterday.
The Supreme Court yesterday held that all coal block allocations made since 1993 till 2010 before pre-auction era during previous NDA and UPA regimes have been done in an illegal manner by an "ad-hoc and casual" approach "without application of mind".
However, the consequences arising from the verdict of such coal blocks will be considered after further hearing by the apex court.