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Monnet Ispat & Energy Ltd stock on Thursday recovered somewhat from sharp fall in the early session. The stock reacted positively after the company informed the stock exchanges that its application for an iron ore block in Jharkhand had finally been turned down and not a mine lease.
The company said the perception that it lost an asset created “misunderstanding.” The stock intra-day plunged from Rs 390 to Rs 309. After the clarification, the stock reduced losses and closed at Rs 327.5, down over 15 per cent overnight.
The company in a statement to the stock exchanges said: “The company had made an application for an iron ore block to the Jharkhand Government in 2004-05 with intent of putting up investments in the sponge iron/steel plant in the State. The application was recommended by the State Government to the Central Government for favourable consideration for Monnet along with other companies.”
Subsequently, Monnet said, the State Government withdrew the recommendation. After that the company along with peers had approached the High Court against the “withdrawal.”
But the Jharkhand High Court upheld the decision of the State Government. The order of the High Court was challenged in the Supreme Court by all the companies, who were affected by the order. The Supreme Court, however, also upheld the decision of High Court. By implication, the application for the Jharkhand mine lease came to naught.
> jayanta.mallick@thehindu.co.in
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