Pokarna tanks 20% after USDOC hikes preliminary CVD for subsidiary

US Department of Commerce (USDOC) has amended preliminary countervailing duty (CVD) for Pokarna Engineered Stone (PESL) from 4.32 per cent to 83.79 per cent.

Shares of Pokarna Limited were locked in lower circuit of 20 per cent at Rs 128 on Monday, extending Friday's fall of 6 per cent, on the BSE after US Department of Commerce (USDOC) amended preliminary countervailing duty (CVD) for Pokarna Engineered Stone (PESL) from 4.32 per cent to 83.79 per cent.

PESL, wholly-owned subsidiary of Pokarna, is India’s largest exporter of natural quartz surface to the US. The major part of Pokarna's revenue comes from the US markets and quartz contributes nearly 68 per cent to the company's overall revenue.

Pokarna, in a regulatory filing, said it strongly disagreed with USDOC’s amended preliminary CVD determination. "The magnitude of this amended preliminary CVD duty is unfounded, absurd and divorced from reality...We continue to have full confidence that USDOC will conduct its investigation in fair and fact-based manner and we are confident that this unfounded preliminary CVD will be corrected and reversed in the final determination”, it said.

Pokarna in annual report 2018-19 said the USDOC has initiated its investigation and is expected to make a preliminary determination regarding countervailing duties in October 2019, and in December 2019 for anti-dumping duties.

"PESL categorically denies allegations of subsidies and dumping and will vigorously defend itself against the unfounded allegations. Final decisions in these investigations are expected in April 2020," the company said.

In the past two months, Pokarna has outpaced the market by surging 34 per cent, as compared to 12 per cent rise in the S&P BSE Sensex till Thursday.

Till 12:42 pm, a combined 50,423 shares had changed hands on the NSE and BSE. There were pending sell orders for 166,146 shares on both the exchanges, the data shows. The stock hit 52-week low of Rs 112 on July 23, 2019.