Difficult to foresee Supreme Court's decision on illegal mine allocation: Anish Damania

In a chat with ET Now, Anish Damania, Head-Institutional Equities, IDFC Securities, shares his view on the Suprme Court's decision on illegal mine allocation.

ET Now: It is the metals pack which is going to be of utmost importance and Supreme Court giving its verdict yet again in the coal block allocation case. What is the sense that you are getting? What is the market feeling? Is it going to be a penalty or do you think the coal mines are going to be de-allocated?

Anish Damania: There is no point second-guessing what the Supreme Court is going to do. It is just that it has held these transactions illegal. So typically an illegal transaction is void ab initio but however last time, Supreme Court said that cancel the 2G allocation straightaway. But this time, they want to hear once again on that which means a lot of people feel that there could be some leeway there. But it is very difficult for me to read their mind or even while we speak to companies, they also want to keep the fingers crossed and look at things as they go by because even in case of penalties, how will you levy the penalties.

Is it going to be some one-shot penalty, is it going to be linked to your previous production, how much money you made on it or what is it nobody knows. Or even if it means de-allocation or cancellation of the coalmine, what it could entail, how it could be taken forward because these coalmines are producing somewhere closer to 50 million tonnes of coal which is equivalent to just under 10 per cent of Coal India’s production and if these mines get de-allocated and nothing happens to them, it will be a national waste at a time when we are struggling to get more coal out of Coal India or to meet the demands of the various end user industries. So let us see how this goes by. I am very comforted by the statements which have come out of the government and recently, they have said that they will come out very quickly with action plan post the Supreme Court judgement.