Rain Industries hits lower circuit

The stock tanked as the Supreme Court rejects its plea for enhancement of import limit of petcoke for better capacity utilization and expansion. Rain Industries was down 5 per cent at its lower circuit limit in the morning session on Monday.

In July 2018, the Supreme Court of India banned the imports of petcoke for use as a fuel to tackle air pollution. The court, however, exempted some industries which used petcoke as feedstock, but did not include calciners or aluminium smelters in this group. After several representations from calciners and the aluminium industry in October 2018, the court exempted calciners permitting an import of up to 1.4 million metric tons of green petroleum coke per year as feedstock.

Following this Rain Industries had filed impleadment citing expansion of its Calcined Petroleum Coke (CPC) plant in Andhra Pradesh SEZ and the rationale that the company will import CPC to blend the same with CPC manufactured in its plant at Visakhapatnam and export an equivalent quantity of CPC, but keep the net import of CPC into India within the limit fixed by the court. The company also cited its deployment of advanced Flue Gas Desulphurization (FGD) system that reduces sulphur dioxide emissions by more than 90 per cent for a hike of higher import limit.

The company had applied for an enhancement of the import limit of 1.4 Million Tons per year on raw petcoke by 488,000 Tons per year for manufacturing CPC and increase the import limit of 0.5 Million Tons per year of CPC by 370,000 Tons per annum for blending at the company's SEZ plant. The apex court rejected the plea and reiterated its October order that said the outer limit for import of raw pet coke cannot exceed 1.4 MT per annum in total.

Reacting to this update, at stock was stuck in its lower circuit limit at Rs. 108.60 per share, down Rs. 5.70 or 4.99 per cent. While the benchmark index BSE Sensex was at 36,315.96, down by 153.47 points or 0.42 per cent on Monday.