Coal India initiates tranche-VII linkage auction for non-regulated sector; know more here

Linkage auctions for the non-regulated sector

Coal India Ltd (CIL) has launched the seventh tranche of linkage auctions for the non-regulated sector (NRS), ensuring a long-term coal supply by extending the fuel supply agreement (FSA) tenure to 10 years. This move comes shortly after the completion of tranche-VI. Tranche-VII, initiated in December 2023, specifically addresses the coal demand of the sponge iron sub-sector customers. Despite a low conversion ratio in tranche-VI, CIL remains committed to supplying coal to meet the normative requirements of various industrial sectors, including sponge iron.

The response to tranche-VI was robust, with 99% of the offered quantity successfully booked, totalling 10.98 million tonnes. South Eastern Coalfields Limited (SECL) and Mahanadi Coalfields Limited (MCL) contributed significantly, accounting for 86% of the offered quantity. However, the conversion of successful bids into FSAs varied, prompting CIL to extend the timeline by 75 days for FSA signings. Additionally, CIL is conducting single-window e-auctions to meet short-term coal requirements.

Ending the current fiscal year, 56.7 million tonnes of coal were successfully booked, and CIL aims to increase availability further under the e-auction window, targeting 20% of the envisaged production for the fourth quarter.

Company profile 

Coal India Ltd is mainly engaged in mining and production of Coal and also operates Coal washeries. The major consumers of the company are the power and steel sectors. Consumers from other sectors include cement, fertilizers, brick kilns etc.

Stock price movement 

Today, the stock opened at Rs 383.05 and has touched a high and low of Rs 387 and Rs 382.15, respectively. The BSE group ‘A’ stock of face value of Rs 10 has a 52-week high and low of Rs 395.80 and Rs 207.70, respectively. Last one week high and low of the scrip stood at Rs 395.05 and Rs 379.25, respectively. The current market cap of the company is Rs 2,37,881.31 crore.

The promoters holding in the company stood at 63.13%, while Institutions and Non-Institutions held 31.96% and 4.91%, respectively.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.