Last week, the government had said it was re-examining bids for eight coal blocks, with Coal Secretary Anil Swarup terming the bids as ‘outliers’, without mentioning the word ‘cartelisation’
In a major blow to Jindal Steel and Power , the government has rejected two of its successful bids for the recently auctioned coal blocks. Also, the government has rejected one bid by Balco.
The winning bids for all three blocks were far too low compared to the bids in the first round of auctions, leading to allegations of cartelization among the bidders.
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.
Last week, the government had said it was re-examining bids for eight coal blocks, with Coal Secretary Anil Swarup terming the bids as ‘outliers’, without mentioning the word ‘cartelisation’.
“There is a pattern and if somebody falls outside that pattern that needs an examination,” Coal Secretary Anil Swarup had said in an interview to CNBC-TV18.
“Whether it is a cartelisation or not is not something which I can say as of now,” he said.
In the eight winning bids which the government is reexamining, the auction was over quickly and the winning bids were much lower than those in the first round of auctions.
Jindal Steel shares have been volatile over the past few months, first plunging when the coal blocks were cancelled in September last year, and then recovering this month after the company managed to win back its blocks cheaply.
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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.