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Govt cancels 4 winning coal bids by JSPL, Balco

The ministry had examined nine blocks whose surprise low bids prompted the designation “outliers”. But bids for five of those mines were accepted, Coal Secretary Anil Swarup said in a tweet message early on Saturday.

In a major blow to Jindal Steel & Power , the government today said it was rejecting three of its successful bids in the recently-concluded coal block auctions, along with one by Balco.

The ministry had examined nine blocks whose surprise low bids prompted the designation “outliers”. But bids for five of those mines were accepted, Coal Secretary Anil Swarup said in a tweet message early on Saturday.

Although the winning bids for the nine mines were the highest in their individual auctions, they were low by comparison with the winning bids for other similar blocks.

JSPL had won bids for the Tara coal block at Rs 126 per tonne and for the Gare Palma IV/2 and 3 blocks at Rs 108 per tonne. In comparison, companies had bid in excess of Rs 2000 per tonne for some of the coal blocks in the earlier rounds.

Balco’s rejected bid for Gare Palma IV/1 was at Rs 1585 a tonne.

“Department (Coal ministry) will take the final decision on the rejected bids, it will deliberate and then decide,” Coal and Power Minister Piyush Goyal told PTI today.

But Jindal Steel and industry consultants have said it was wrong to cancel winning bids after a base price of 100 rupees per tonne was set.

Others have said reassessing the auctions after the posting of the highest bids sends the wrong signal to the market ahead of more auctions.

“The reason cited being “the highest bidder doesn’t reflect fair value”, which we fail to understand as our bid was much below the ceiling price during the reverse auction process. We had followed a consistent and prudent bidding strategy throughout the coal block auction process, with a serious long term business perspective,” a JSPL spokesperson said.

“We are puzzled with the decision and would make our best efforts to engage in a dialogue with the Coal Ministry and government authorities to present the facts.”

The government is looking to sell off more than 200 coal mines and parliament passed a bill on Friday to keep the process going. The measure replaces an executive decree reissued in December after it was issued in October.

— With inputs from Reuters and PTI

Jindal Steel stock price

On March 20, 2015, Jindal Steel & Power closed at Rs 164.95, down Rs 8.7, or 5.01 percent. The 52-week high of the share was Rs 350.00 and the 52-week low was Rs 125.05.


The company’s trailing 12-month (TTM) EPS was at Rs 3.88 per share as per the quarter ended December 2014. The stock’s price-to-earnings (P/E) ratio was 42.51. The latest book value of the company is Rs 142.79 per share. At current value, the price-to-book value of the company is 1.16.

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