Indian Metals & Ferro Alloys shares experienced significant selling pressure on Tuesday, declining as much as 12.00% in what marks the biggest single-day fall since January last year. The stock extended losses for the second consecutive day, having declined in three out of the last four trading sessions.

South African Supply Concerns Drive Market Sentiment

The primary concern weighing on investor sentiment stems from developments in South Africa, a key global supplier of ferrochrome. Market participants are closely monitoring whether South African ferrochrome smelters will restart operations following potential electricity tariff relief.

Reports indicate that South Africa's electricity regulator, NERSA, is expediting an application from Eskom, the country's state-owned power utility responsible for electricity generation, transmission, and distribution. Eskom has requested a temporary reduction in the NPA tariff for Calendar Year 2026.

Industry Competitiveness Challenges

Major producers Samancor and Glencore-Merafe had previously declared hardship under their NPAs, including the take-or-pay provisions, as high power costs rendered South African smelters globally uncompetitive. The significance of electricity costs cannot be understated, as they alone account for 35.00% to 40.00% of ferrochrome production costs.

With tariff relief discussions now on the table, efforts are being made to revive South Africa's ferrochrome industry. Should tariffs be reduced, some South African smelters could restart operations, potentially increasing global supply and putting pressure on international prices.

Domestic Price Pressures

Closer to home, domestic ferrochrome prices have experienced a notable decline from recent peaks. The price correction represents another headwind for the company's near-term prospects.

Stock Performance

Shares of Indian Metals and Ferro Alloys closed Tuesday's session trading 8.30% lower at ₹1,337.00, having touched an intraday low of ₹1,217.00. The stock's recent performance reflects the market's concerns about both global supply dynamics and domestic pricing pressures in the ferrochrome segment.

Indian Metals & Ferro Alloys Limited has settled a regulatory compliance matter with the Ministry of Corporate Affairs by paying a compounding fee of ₹23.00 lakh. The company received an order dated December 27, 2025, from the Regional Director, Eastern Region, Ministry of Corporate Affairs, imposing the fee on the company and its current and former Key Managerial Persons (KMPs).

Regulatory Order Details

The compounding fee has been levied under section 441 read with section 134 of the Companies Act 2013 for violations during FY 2018-19 and FY 2019-20. The order follows a hearing conducted on December 16, 2025, by the Regional Director regarding compounding offences under the Companies Act.

Nature of Violations

The company faced two specific disclosure violations during the mentioned financial years:

• Income Recognition Disclosure: The company failed to provide disclosures regarding non-recognition of income from interest on unsecured loan given to the subsidiary in the Directors' Report for FY 2018-19 and FY 2019-20.

• Related Party Transaction Disclosure: No disclosures were given regarding particulars of contracts or arrangements with related parties referred to in section 188(1) along with the justification for entering into such contract or arrangement in Form AOC-2 in the Directors' Report for the same financial years.

Company's Proactive Approach

Indian Metals & Ferro Alloys had voluntarily filed a compounding application before the Registrar of Companies, Cuttack under Section 441 of the Companies Act, 2013 on June 27, 2024. This voluntary filing demonstrates the company's proactive approach to addressing regulatory compliance matters.

Financial Impact Assessment

According to the company's disclosure, there is no material impact on financial, operational or other activities from these orders. The company has already made the payment to the relevant authority as required under the order.

The matter has been communicated to both the National Stock Exchange of India Limited and BSE Limited for record purposes, ensuring transparency with all stakeholders regarding this regulatory compliance update.