Steel maker JSPL surged as much as 29 per cent on Thursday after the company won back some mines cancelled by the Supreme Court last year.
The Gare Palma IV/2 and three other coal blocks that Jindal Steel and Power won in the ongoing coal auction serve 50 per cent of the company's coal requirement, analysts say. Coal from these blocks will primarily be linked to JSPL's 1000 MW Tamnar-1 power plant in Chhattisgarh.
Analysts highlighted that JSPL managed to win the blocks at a relatively inexpensive bid of Rs.108 per ton in an auction where bids have been quoted as high as Rs.1,100 per ton.
Other captive mine that JSPL had, including Gare Palma IV/1, will go into auction later this week.
Rakesh Arora, managing director and head of research at Macquarie Capital Securities (India), told NDTV that "after winning back the coal blocks, the concerns about JSPL being a going concern have been addressed... Ideally in case of a going concern a stock would trade at one time price to book, which is around Rs 225-230 for JSPL".
JSPL had to cut over 750 jobs in the December quarter as the company reported a consolidated loss of Rs 1,675 crore mainly due to payment of the Supreme Court-imposed penalty on the coal block allocation scam.
The turnover of the company also fell 2 per cent to Rs 5,045 crore in the quarter under review from Rs 5,142 crore in the year-ago period.
Shares in JSPL ended at Rs 199.80, up 28.61 per cent, as against 0.48 per cent gain in the Sensex.
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