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Jindal Steel and Power (JSPL) has dipped 8% to Rs 233, extending its previous day’s fall, after Supreme Court (SC) on Monday declared that coal blocks allocated between 1993 and 2010 as illegal.
In past two trading sessions, the stock has declined 20% from Rs 292 on August 22 on the National Stock Exchange (NSE). A combined 4.57 million shares changed hands on the counter in first 15 minutes of trade on NSE and BSE.
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 US$2.6 billion investment in the Angul Steel & Power project as the associated Utkal B1 block is unlikely to be allocated now, says Chirag Shah, metals, mining & materials analyst Barclays.
In its verdict, the court said that no objective criteria were followed and guidelines were breached in these allocations.
The court will take a decision on re-allocation of mines on 1 September, 2014 and will reserve cancellation on a case-by-case basis.
In past two trading sessions, the stock has declined 20% from Rs 292 on August 22 on the National Stock Exchange (NSE). A combined 4.57 million shares changed hands on the counter in first 15 minutes of trade on NSE and BSE.
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 US$2.6 billion investment in the Angul Steel & Power project as the associated Utkal B1 block is unlikely to be allocated now, says Chirag Shah, metals, mining & materials analyst Barclays.
In its verdict, the court said that no objective criteria were followed and guidelines were breached in these allocations.
The court will take a decision on re-allocation of mines on 1 September, 2014 and will reserve cancellation on a case-by-case basis.
