Jindal Saw Ltd. shares declined 4.3% on Thursday, February 19, following the company's announcement that its API licence for seamless pipes has been suspended. According to reports from CNBC TV18, the suspension was triggered by 'non-conformances' (NCs) identified during an audit by the American Petroleum Institute (API). The suspension restricts the company from affixing the API monogram on its API seamless pipes until the matter is resolved.
The API monogram serves as a critical mark of quality compliance with global oil and gas industry standards, including API 5L specifications for line pipes. As reported by CNBC TV18, the suspension can potentially affect sales to oil and gas clients who mandate API-certified products. However, Jindal Saw indicated that the financial impact may not be material, as the company has allocated its seamless pipe manufacturing capacity to other products pending revocation of the suspension.
According to the company's disclosure, Jindal Saw is taking appropriate corrective measures to address the non-conformances identified during the API audit. The company's present API licence was valid until April 6, 2026, as per the disclosure. Jindal Saw manufactures iron and steel pipes for oil and gas, water and industrial uses, and indicated it will update stock exchanges on any material developments regarding the suspension matter.
The stock decline represents a continuation of recent performance challenges, with Jindal Saw shares having declined 11% in the past six months. As reported by CNBC TV18, the shares hit an intraday low of ₹179.1 on Thursday, reflecting investor concerns over the regulatory compliance issues and their potential impact on the company's oil and gas sector business.
