Among the metal stocks, Jindal Steel and Power ended 7.46% higher. SAIL (5.16%), Sesa Sterlite (4.42%) and JSW Steel (2.82%) were among the major gainers. In the power sector, Power Trading Corporation (4.55%), Bhel (4.28%), JSW Energy (3.88%) and Thermax (3.64%) were the major gainers. The BSE benchmark Sensex ended 145.80 points or 0.55% higher at 26,575.65 points on Tuesday.
Among banking stocks, Bank of India (2.76%), ICICI Bank (2.64%), Indusind Bank (1.89%), Yes Bank (1.66%) and Federal Bank (1.48%) were the major gainers. The Bank Nifty settled 210.65 points or 1.3% higher after touching a record high 16,452.85 points in Tuesday's trade.
On Monday, the government had unveiled a follow-up action on last months Supreme Court order that cancelled 214 captive coal blocks, effective the end of the current fiscal by seeking to promulgate an ordinance to revert these mines to itself to create a pool and subsequently reallocate blocks from it.
While central and state public-sector entities will be allotted blocks on a nomination basis, a specified number of the blocks will be allocated to private companies through e-auction for end-use purpose.
Finance minister Arun Jaitley, who announced the decision after a Cabinet meeting, also made it clear the Centres intent to move towards denationalisation of commercial coal mining. While the first tranche of blocks for e-auction will be for the exclusive use by the firms they are allocated to, the ordinance will contain an enabling provision for commercial mining, Jaitley said, without giving a time-frame.
As far as the private sector is concerned, the actual users of coal in the cement, steel and power sectors, who apply for a certain number of coal mines, will be put in the pool and there would be an e-auction. A sufficient and adequate number of mines would be put so that actual users go back with the mines," Jaitley added.
S Ranganathan, the head of research at LKP Securities, believes the measures announced by the Cabinet could potentially ease the supply concerns faced by the power and metal companies, but a lot more could be done in the coal sector.
Analysts feel the reforms are on predictable lines. There is no de-nationalisation of coal mining. There is no impact on the structure of Coal India; its interests and mining requirements would be fully protected. CIL has over 200 mines where production activity is yet to begin these will be expedited, Nomura said in a report. The shares of Coal India ended 1.6% lower at Rs 355.05 on Tuesday.