Steel cos shares dip by up to 8%

Shares of steel companies plunged following allegations of huge losses to govt in coal block allocation.

Written by Agencies | Mumbai | Published: March 22, 2012 9:06:41 pm

Shares of steel companies,led by JSW Steel,today plunged by up to 8 per cent on bourses,following allegations of huge losses to government in coal block allocation.

Jindal Steel plummeted by 7.26 per cent to settle at Rs 546.55,while JSW Steel was down 7.53 per cent at Rs 719.75 on the BSE.

Investors also abandoned stocks like Steel Authority of India,Tata Steel and Bhushan Steel which lost 4.43 per cent,4.55 per cent and 0.56 per cent,respectively.

“Metals and power stocks saw major selling pressure on back of the leaked draft CAG report,” Milan Bavishi Head Research Inventure Growth and Securities said.

An initial audit report estimating Rs 10.67 lakh crore loss to the exchequer on account of allotment of coal blocks during 2004 to 2009 without auction caused an uproar in Parliament today and was described as “exceedingly misleading” by the CAG himself.

In the leaked report on allotment of coal blocks,CAG had estimated a “windfall gain” of Rs 6.31 lakh crore (PSUs – Rs 3.37 lakh crore,and private parties – Rs 2.94 lakh crore) based on the prices prevailing during the year of allocation on constant cost and price basis and as on March 31,2011.

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