Coal India, the country’s largest coal producer, re-entered the list of top-50 most valued companies in terms of market captialisation in the country on the back of a strong rally. The stock hit a fresh 52-week high at Rs 195.20, on ralling 12 per cent on the BSE in Wednesday’s intra-day trade on back of heavy volumes. In past three weeks, the stock has zoomed 31 per cent on improved business outlook.
A sharp rally in the share price of Coal India has seen the company’s market capitalisation (market-cap) crossing and regaining Rs 1-trillion mark. Currently, with a market-cap of Rs 1.18 trillion, Coal India stood at 42nd position in overall market-cap ranking, the BSE data shows. The stock had hit a record high of Rs 447 on August 5, 2015.
At 11:06 am; Coal India was trading 9 per cent higher at Rs 190.25 on the BSE. The trading volumes at the counter had jumped over three-fold with a combined 66.59 million equity shares changing hands on the NSE and BSE. The stock trades in the futures & option (F&O) segment, which has no circuit limits.
India’s coal mining sector is dominated by Coal India and the scenario is unlikely to change in the immediate future. Even after the opening up of the coal sector to private commercial mining by the government of India, the proportion of coal supply from Coal India is likely to dominate the Indian market.
Coal accounts for more than 55 per cent of the total commercial energy production in India and is largely in demand from key sectors such as power and steel. Meanwhile, Coal India had identified 23 mines for closure in the financial year 2002-21 (FY21) out of which production from 12 mines has been suspended. Even after considering all the closure costs (including labour costs), the company said it will be saving to the tune of at least Rs 500 crore.
As per IEA’s India Energy Outlook 2021, even though coal’s share in India’s total primary energy demand will steadily decline in percentage terms from 44 per cent in 2019 to 34 per cent in 2040 (stated policies scenario), demand for coal will still grow by 31 per cent over the same period in absolute terms, from 413 million tonnes of oil equivalent (mtoe) in 2019 to 541 mtoe in 2040.
Based on the demand projection in ‘Vision 2024’ for the coal sector and subsequent demand projection on Coal India, a roadmap has been prepared to project production plan in the medium-term wherein Coal India has envisaged 1 billion tonne (Bt) coal production in the year 2023-24 to meet the coal demand of the country. To achieve this target, Coal India has identified major projects and assessed their related issues, the company said in the financial year 2020-21 (FY21) annual report.
PTI on September 13, 2021 had reported that Coal India has informally discussed the matter with board members and most of them have acknowledged the need to hike prices of coal. The miner is awaiting the government’s nod following which it will take the final call.
