JSW Steel dips nearly 7pc; m-cap erodes by Rs 905 cr

The company yesterday said its Karnataka unit may come to a complete closure due to acute shortage of iron ore -- a development that could lead to shortage of steel in the domestic market and increase in prices.

Reacting to the news, the company scrip declined by 7.20 per cent on the BSE and 7.18 per cent on the National Stock Exchange (NSE) to hit a 52-week low of Rs 566.50 and Rs 566.55, respectively.

At the end of today's trading the stock was quoted at Rs 570, down 6.63 per cent on the BSE, thereby eroding the market valuation of the company by Rs 905 crore to Rs 12,717 crore from Rs 13,6222 crore yesterday.

On the NSE, the scrip settled at Rs 568.70, down 6.83 per cent. Marketmen said the announcement by the company that the Karnataka facility may be shut down acted as a negative trigger for the stock. Besides, the overall bearish sentiment also added to the pressure.

The company resorted to a massive production cut of 70 per cent in the Vijayanagar plant in Karnataka due to shortage of iron ore after the Supreme Court imposed a ban on mining in the state.

"We may have to shut entirely (Vijayanagar plant)...There is a good possibility of that (closure) if the situation does not improve," JSW Vice-Chairman and Managing Director Sajjan Jindal said.

Meanwhile, Steel Secretary P K Misra has said the government will present a fact-sheet before the apex court on how many units have been closed or have resorted to production cut. He has sought inputs from the units in the state for the same.