Shares of JSW Steel, Hindalco and Tata Power today tanked on the BSE following the Government move to deallocate one more coal mine, and deduct bank guarantees in the case of two companies.

The Government yesterday decided to deallocate the Gourangdih ABC coal block given jointly to JSW Steel and Himachal EMTA in 2009, and deduct the bank guarantee of the mine given to Hindalco and Tata Power jointly.

Shares of JSW Steel opened at Rs 717.90, then tumbled 3.76 per cent to an early low of Rs 697. It was later trading at Rs 718, still lower by 0.87 per cent from yesterday’s close on the BSE.

The IMG panel decided to recommend deduction of bank guarantee in the case of a mine jointly allotted to the Aditya Birla Group’s flagship firm Hindalco and Tata Power due to delays in development of the block.

Shares of Hindalco Industries today opened weak and then fell 2.13 per cent to an early low of Rs 114.75 on the BSE. It was later trading at Rs 115.25, down 1.71 per cent at 11.01 hours, from yesterday’s close.

The stock of Tata Power also followed suit; it fell 0.45 per cent to an early low of Rs 98.60. It was quoted at Rs 98.75, down by 0.30 per cent on the BSE at 11.20 hrs.

The total number of blocks approved for deallocation has gone up to five, out of a total of seven recommended by the IMG so far. Government has approved deducting bank guarantee (BG) in the case of five mines out of a total of eight recommended by the IMG so far.

(This article was published on September 18, 2012)
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