Hindalco, Jindal shares surge on govt decision to auction coal blocks
A day after the government decided to e-auction coal block allocations, shares of power and steel companies surged.
While Jindal Steel and Power Ltd gained 7%, while Hindalco Industries Ltd was up 2.2% in early trade on Tuesday.
The new auction-based system will replace the earlier controversial policy of allotting coal blocks based on recommendations of a panel of bureaucrats, which the Supreme Court had struck down last month as arbitrary.
The court had cancelled 214 blocks allotted since 1993, a move that threatened a nascent economic recovery.
Currently only steel, power and cement companies are allowed to own mines for their own use.
But in the future there could be commercial use of mines, a move that would enable private companies to get into trading coal and break the monopoly of public sector monolith Coal India.