Shares of banks which have lent to companies which control the illegal blocks fell as well. Photo: Bloomberg
Mumbai: Shares of metals, mining and power companies were trading lower ahead of a Supreme court verdict on the coal block allocation case, expected at 2pm on Wednesday.
Jindal Steel and Power Ltd fell 2.2%, Monnet Ispat and Energy Ltd 3%, Usha Martin Ltd 22.6%, Prakash Industries Ltd 5.6%, Steel Authority of India Ltd (SAIL) 1%, Hindalco Industries Ltd 0.5%, Tata Steel Ltd 1.5%, Bhushan Steel Ltd 5%, JSW Steel Ltd 0.6%, Hindustan Zinc Ltd 0.9%, Sesa Sterlite Ltd 0.6% and NMDC Ltd 1.1%.
On 8 September, the government had filed an affidavit in the Supreme Court, leaving the final decision to the court. The government also requested the court to spare 46 coal mines, of which 40 are functional and six are about to become operational.
Union power minister Piyush Goyal had also said that the government was not worried about cancellations, saying it would only lead to a short-term disruption of power generation. The government, Goyal had said, was ready to re-auction the blocks in such an eventuality.
Since 25 August—when the Supreme court has declared all coal block allocations since 1993 illegal—Sarda Energy and Minerals Ltd has fallen 39.82%, Jindal Steel and Power Ltd 28.4%, Monnet Ispat and Energy Ltd 24.3%, Usha Martin Ltd 22.6%, Prakash Industries Ltd 15.6%, Steel Authority Of India Ltd 14.5%, Hindalco Industries Ltd 13.2%, Tata Steel Ltd 9.6%, Bhushan Steel Ltd 8.9%, JSW Steel Ltd 6.4%, Coal India Ltd 6.4%, Hindustan Zinc Ltd 4.5%, Sesa Sterlite Ltd 3.7% and NMDC Ltd 2.8%. The BSE metal index fell 9% during this period.
Shares of banks which have lent to companies which control the illegal blocks fell as well. According to Karvy Stock Broking Ltd , the banking sector has an exposure of Rs.5.01 trillion to the power sector, and the exposure has grown from 4.3% of the non-food credit in March 2008 to 8.83% in June 2014. Banks had financed many new power projects during this period, which may be negatively impacted by the court verdict.
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