Power, metal indices hit by SC order on coal blocks

Power and metal index on the leading Indian stock exchange were trading in the red in post-afternoon trade session Tuesday, a day after the Supreme Court's order nullifying coal block allocations made between 1992-2010.

The S&P Bombay Stock Exchange's power index declined by 50.79 points, metal index was down 24.96 points and capital goods index fell 237.68 points.

Major power, metal and capital goods players affected by Monday's order on the BSE were Reliance Power, down 7.88 percent at Rs.76, Adani Power, 6.63 percent at Rs.49.30, Jindal Steel, down 6.18 percent at Rs.237.50 and JP Power, down 5.41 percent at Rs.14.85.

Blue chip stocks which were down on BSE include TATA Power, down 3.49 percent at Rs.87.20, BHEL, down down 2.31 percent at Rs.226., Larsen and Toubro (L&T), down 1.59 percent at Rs.1,500; and Coal India, down 1.42 percent at Rs.353.45.

The Supreme Court Monday held that all coal block allocations made since 1993 till 2010 have been done in an illegal manner by an ad-hoc and casual approach.

An apex court bench comprising Chief Justice R.M. Lodha, Justice Madan B. Lokur and Justice Kurian Joseph has stopped short of pronouncing instant cancellation of the coal blocks as it may have serious repercussions.

Instead, it has suggested the setting up of a committee headed by a retired apex court judge to examine what should be done for the reallocation of these coal blocks, while the next hearing will be held Sep 1 to consider the matter of setting up a committee.

The scandal involving coal block allocations broke in 2012 after the national auditor questioned the government's allocating the blocks without auction, which the Comptroller and Auditor General (CAG) said had brought windfall profits to certain companies and cost the exchequer a notional loss of Rs.186,000 crore.