Shares of steel companies, led by JSW Steel, on Thursday, 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 Bombay Stock Exchange.
Investors also abandoned stocks such as 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 on Thursday 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. — PTI