JSPL slumps to 52-week low

Jindal Steel & Power lost 7.7% to Rs 175.10 at 10:45 IST on BSE, with the stock extending Wednesday's slumps as brokerages downgraded the stock post the Supreme Court verdict on coal blocks.

Meanwhile, the BSE Sensex was down 110.78 points, or 0.41%, to 26,633.91

On BSE, so far 12.56 lakh shares were traded in the counter, compared with an average volume of 4.61 lakh shares in the past one quarter.

The stock hit a 52-week low of Rs 170.75 in intraday trade today, 25 September 2014. The stock hit an intraday high of Rs 186.60 so far during the day. The stock hit a 52-week high of Rs 350 on 9 June 2014.

The stock had underperformed the market over the past one month till 24 September 2014, falling 35.53% compared with 1.23% rise in the Sensex. The scrip also underperformed the market in past one quarter, sliding 42.9% as against Sensex's 5.42% rise.

The large-cap company has an equity capital of Rs 91.49 crore. Face value per share is Re 1.

Shares of Jindal Steel & Power (JSPL) had slumped 9.99% to Rs 189.70 after the Supreme Court in its verdict announced on Wednesday, 24 September 2014, scrapped 214 out of 218 coal blocks allocated between 1993 and 2010 it had already declared illegal due to irregularities in the allocation of the blocks. The four coal blocks which are exempt from the verdict are run by the Central government with no joint venture with the private sector.

Meanwhile, the Supreme Court in its final verdict has given six months' breathing time for the operational blocks to wind up operations. As per the order, allottees will have to pay a fine of Rs 295 per tonne from the time the coal was mined.

As per reports, JSPL is the biggest loser of the Supreme Court verdict as it will have to part with Gare Palama 1, 2 and 3 blocks, which produce 12 million tonne per annum (mtpa) of coal. Also JSPL will have to fork out Rs 3000 crore as fine on cancelled blocks, the report indicated. The company is also likely to a post a sharp decline in profitability post 2014-15 as it would have to substitute captive coal with imported coal which is about four times more expensive, reports indicated.

A bench headed by Chief Justice R M Lodha last month had held that all coal blocks allocations since 1993 by various regimes at the Centre have been made illegally and arbitrarily. However, it had stopped short of cancelling them saying, what the consequences will be is the issue which remains to be tackled.

Shares of JSPL have been on sustained downtrend, sliding 40.49% since its close of Rs 294.25 on 22 August 2014. The fall was triggered by the Supreme Court on 25 August 2014 terming the method of allotment of coal blocks since 1993 as illegal.

JSPL's consolidated net profit fell 15.4% to Rs 418.13 crore on 10.3% increase in total income to Rs 5068.79 crore in Q1 June 2014 over Q1 June 2013.

JSPL is one of India's major steel producers with a significant presence in sectors like mining, power generation and infrastructure.

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