Lending support

Navin Jindal recently bought 6 lakh shares at ₹178 a share

Looks like Navin Jindal wants to make a statement to jittery investors who have dumped shares of Jindal Steel & Power following the cancellation of coal blocks by the Supreme Court. The stock has crashed 30% to ₹166 since the SC ruling, way below the last buy-back price of ₹260 a share. Jindal recently bought 6 lakh shares at ₹178.25 a share, taking his total stake in the company to 0.53%.

The promoters currently hold a 60% stake in the company, which currently has a market cap of ₹15,100 crore. JSPL’s profitability is expected to take a knock after a coal block linked to its Odisha steel plant producing 12.5 MTPA steel and 2,600 MW of power was deallocated. With investors becoming wary of companies facing regulatory issues, the stock price has fallen below the book value of ₹247 a share. Analysts believe that even if the coal blocks under question are removed, the valuation of the company will not correct more than ₹30-40 a share. But, for now, it seems like Jindal will have to do the buying till investors come to terms with the new normal. 


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