Steel shares were clobbered on the bourses on Monday as players feel the sector’s growth story will be hit by the Union government’s move to impose export duties. The Centre’s decision led to brokerages also downgrading some of the companies.

Reflecting the investor apprehension, Tata Steel, JSW Steel and SAIL hit the lower circuit during the day and closed big major cuts.

The Tata Steel stock hit the day’s low of Rs 1,003.15 — a drop of over 14 per cent. It settled at Rs 1,023.60, a fall of 12.53 per cent, or Rs 146.60, over the last close.

Similarly, the JSW Steel counter plunged to a day’s low of Rs 538 and ended at Rs 547.60 — a 13.20 per cent drop over the previous finish.

SAIL also witnessed a sell-off as it fell to a 52-week low of Rs 72.20 during intra-day trades and then ended at Rs 73.90, thus eroding nearly 11 per cent of its previous value. Jindal Steel and Power finished deep in the red, settling at Rs 395.55 — a fall of 17.40 per cent.

On Saturday, the Centre announced key changes as part of which it hiked export duties on iron ore and concentrates to 50 per cent from 30 per cent.

It imposed a 45 per cent duty on iron pellets from zero earlier. The Centre also imposed a 15 per cent export duty on hot-rolled and cold-rolled products from nil earlier.

The selling pressure in these steel stocks came after various brokerages said that the Centre’s decision will be negative for the sector. Analysts at ICICI Securities said in a note that the development is extremely negative for the steel sector and it will lead to broad-based multiple de-rating.

“We downgrade steel/stainless equities under our coverage to either hold/reduce/sell. We downgrade Tata Steel, JSPL, JSW Steel and SAIL to reduce. Clearly, while we were expecting an EBITDA (earnings before interest, taxes, depreciation and amortisation) increase cycle to play out over the next 3-4 quarters in steel, the same has been interrupted,’’ the analysts added.

According to the brokerage, till date, investors have only looked at favourable policy action towards steel and this is the first time where there has been an unfavourable or unexpected policy action to curb inflation.

“We have downgraded our P/B (price to book) multiple for the entire sector in light of the event. And this also takes out a critical part of our thesis, that India can be a 30-40 million tonne per annum exporting destination over the next 3-4 years as domestic demand ebbs,’’ they said.

CLSA also downgraded Tata Steel to underperform from buy, while Prabhudas Lilladher lowered its outlook for the sector to underweight.

Edelweiss Securities said the stainless steel makers will be impacted the most by the export levy.