Tata Steel tumbles after SC imposes limited ban on Odisha mining

Tata Steel fell 4.30% to Rs 440.90 at 15:19 IST on BSE on reports the Supreme Court on Friday, 16 May 2014, passed a limited mining ban on Odisha.

Meanwhile, the BSE Sensex was up 316.93 points, or 1.33%, to 24,222.53.

On BSE, so far 34.59 lakh shares were traded in the counter, compared with an average volume of 9.37 lakh shares in the past one quarter.

The stock hit a high of Rs 484.85 so far during the day, which is also a 52-week high for the counter. The stock hit a low of Rs 428.30 so far during the day. The stock hit a 52-week low of Rs 195.40 on 7 August 2013.

The stock had outperformed the market over the past one month till 15 May 2014, rising 12.81% compared with 6.32% rise in the Sensex. The scrip had also outperformed the market in past one quarter, rising 24.16% as against Sensex's 17.38% rise.

The large-cap company has an equity capital of Rs 971.21 crore. Face value per share is Rs 10.

Tata Steel has major mining and industrial operations in Odisha. According to reports, the Supreme Court on Friday, 16 May 2014, passed a limited mining ban on Odisha, which produces over 50% of the country's iron ore and manganese, affecting only those who have been operating on deemed renewals for a second time and beyond.

The ban affects only 26 companies who were on their second renewal. They will apply for grant of license to the state which will take a call on their applications within six months, a three-judge bench, comprising justices AK Patnaik, SS Nijjar and FMI Kalifullah, reportedly said.

The state will have to pass reasoned orders on this, the court reportedly said.

Fourteen leases who are operating after their first renewal will be permitted to continue mining. Another sixteen have already been granted leases by the state. These can operate too, reports added.

However, another 102 identified by the central empowered committee, as not working for not having environmental clearances, cannot operate. Another 29 leases which have lapsed or who's clearances have been rejected will not operate till they get clearances, reports said.

Meanwhile, Tata Steel and L&T Infrastructure Development Projects (L&T IDPL), announced during trading hours today, 16 May 2014, that they have executed a definitive agreement with Adani Ports & Special Economic Zone (Adani Ports) to sell 100% stake in the Dhamra Port Company (DPCL) for an Enterprise Value of around Rs 5500 crore. As per the agreement entered into amongst the parties, the transaction is subject to customary conditions precedent including lenders / third party approvals.

DPCL is a 50:50 joint venture between L&T IDPL and Tata Steel. The port was commissioned in May 2011 with an 18 km approach channel and a dedicated 62.7 km rail link to Bhadrak. In FY 2014, DPCL handled 14.3 mtpa of cargo.

As part of Tata Steel's review of its investments portfolio, the board of the company has approved the divestment of its equity holding in the joint venture (JV) at an attractive valuation. To secure its long term requirement and access to a deep-water port for its operations in Jamshedpur and Odisha, Tata Steel has also entered into a long-term cargo handling arrangement with DPCL, Tata Steel said in a statement.

Tata Steel reported a consolidated net profit of Rs 1035.87 crore in Q4 March 2014 as against net loss of Rs 6528.51 crore in Q4 March 2013. Total income from operations rose 22.44% to Rs 42428.05 crore in Q4 March 2014 over Q4 March 2013.

Tata Steel Group is among the top-ten global steel companies with an annual crude steel capacity of over 29 million tonnes per annum. It is now the world's second-most geographically-diversified steel producer, with operations in 26 countries and a commercial presence in over 50 countries.

Powered by Capital Market - Live News