Mining report hits Adani Enterprises hard, stock tanks

Karnataka Lokayukta Santosh Hegde’s report on illegal mining not just cost the chief minister his job, but also has had an impact on the companies named.

The report has led to a 23 percent fall in share price of Adani Enterprises, which came crashing down from Rs 744.55, its closing on Thursday, to a low of Rs 548 on Friday. The crash has wiped off a mind-numbing Rs 2,155 crore in market capitalisation for Adani. Since the report is in public domain, Adani has plunged from a high of Rs 760, losing Rs 2,330 crore in market capitalisation.

[caption id=“attachment_50687” align=“alignleft” width=“380” caption=“Though there were other companies mentioned in the report, Adani has fallen the most. Reuters”] [/caption]

Though there were other companies mentioned in the report, Adani has fallen the most. JSW Steel, also in the firing line, fell 5.77 percent from a high of Rs 821.95 to Rs 770. The stock came down from a high of Rs 862 on Thursday. The company has been accused of bribing the officials and colluding with with G Janardhan Reddy to buy illegal ore. There is more trouble for the company as the Supreme Court has ordered a ban on mining in Bellary with immediate effect.

NMDC, the public sector company which figures in the list, was also on the crash course. It fell from a high of Rs 247.75 to a low of Rs 225.50 on Friday. The stock currently trades at Rs 237, lower by 3.5 percent. NMDC has been accused of under-invoicing sales.

Adani Enterprises has a port in Karnataka, Belekere Port, from where it is alleged to have illegaly exported iron ore. The stock has been the worst performer because Lokayukta has recommended the harshest action of blacklisting the company and barring it from bidding from any government contract or tender. Since the company is dependent on the government for most of its operations, the recommendation, if accepted, will hit it exactly where it hurts.