Vedanta in the red
Three days ago, Vedanta had hit a new high at Rs.334.50 and today it is down in the red at Rs.315, down some 1.5%.
The company announced yesterday after market hours that following a breach in the Ash Pond dyke wall at Jharsaguda at end of August, the State Pollution Control Board, Odisha (SPCB) yesterday issued an order for temporary closure of three units of 135 MW each of its 1215 MW power plant – this means 33% of this power plant is now closed. SPCB has also ordered closure of two plants of 600 MW each of its other 2400 MW plant – 50% of this plant closed. Thus 44% of its total power plant stands closed as of now, albeit temporarily.
The remaining units of the 1215 MW power plant have been allowed to operate till 12th Oct and those of the 2400 MW plant till 20th Sept.
The company has been directed to come up with some concrete plan for compliance within the enxt five days.
The company stated that production will not stop as it has made arrangement to purchase power from outside but surely, this could impact the margins. This will have a minor impact if the matter does get resolved soon but if this gets long drawn, the effect could be much deeper.