JSPL tanks 15% as government cancels two coal block allocations

MUMBAI: Shares of Jindal Steel and Power suffered a big set back and fell 14.97 per cent in intraday trade on Monday as the Coal Ministry cancelled the bids from the Naveen Jindal company after a review.

The government cancelled two bids of Jindal Steel and Power for three blocks Gare Palma IV/2, IV/3 and Tara. JSPL had won back its Gare Palma blocks at the lowest bid in the schedule II auctions of Rs 108/tonne.

It also won the Tara block also for the lowest bid of Rs 126/tonne in the schedule III auctions. JSPL, GMR and Adani group were the bidders for the block.

The company said it is "puzzled" with the decision while stating that it followed a "consistent and prudent bidding strategy" throughout coal block auctions.

Ravi Uppal, MD & Group CEO, JSPL in an interview to ET Now said, the company is very disappointed and saddened by the government decision. The Board will be meeting soon to look at various options.

He added that the company fails to understand the complaint that bids were not competitive. The state governments and Centre would have benefited by Rs 58000 crore by the bids.

Supply of coal from Gare Palma, blocks are vital for UP plants. As of now it is unsure whether the government plans to re-auction the blocks.

According to Angel Broking, the development is a ‘Negative’ for JSPL.

Around 9.89 lakh shares were traded in the counter against two week average of 15.16 lakh shares.