Moneycontrol Bureau
Shares of Tata Steel and JSW Steel saw excellent rebound on Tuesday, up 2-3 percent intraday after brokerages said the Supreme Court (SC) verdict on coal block allocation case will not have any impact on these companies. However, stocks fell 4-5 percent in the previous session.
SC on Monday said all coal block allocations (except those awarded to power projects on competitive bidding for tariffs including UMPPs) post July 14, 1993, both under Screening Committee route and Government dispensation route, were arbitrary and illegal.
"Tata Steel India gets 40 percent of its coking coal needs through captive coal mines; however, all these coal mines (mainly in West Bokaro and Jharia regions) were allocated pre-1993 while JSW has no captive coal or iron ore mines in India and hence is not impacted," said Goldman Sachs.
CLSA agreed with Goldman, saying there is no impact on Tata Steel since its captive coking coal mines were allocated pre 1993 while JSW Steel does not have any operational/upcoming coal mines in India.
The brokerage recommends buying these names if the sector sell-off intensifies further.
At 13:59 hours IST, Tata Steel scrip jumped 1.79 percent to Rs 521 while JSW Steel rose 0.72 percent to Rs 1,253 on the BSE.
Posted by Sunil Shankar Matkar
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