Coal India share price jumps 8% as PM Modi sets the ball rolling on commercial mining

By: |
June 18, 2020 12:44 PM

Coal India stock price has risen 17 per cent from its March low of Rs 119.25. The market capitalisation of Coal India stands at Rs 85,351.88 crore with today's surge in the stock price

Coal India, Coal india share price, PM Narendra ModiPM Modi announced an investment of Rs 20,000 crore which will be made in four coal gasification projects to convert vast resources in environment-friendly fuel

Coal India share price jumped 8 per cent to Rs 139.65 apiece on BSE in Thursday’s volatile session as PM Narendra Modi launched auction process of 41 coal mines for commercial mining. Coal India stock price has risen 17 per cent from its March low of Rs 119.25. The market capitalisation of Coal India stands at Rs 85,351.88 crore with today’s surge in the stock price. PM Modi said that commercial coal block auction is a win-win situation for industry users as new resources will open up, states will earn more revenue and will generate more job opportunities. “PM Modi commented earlier today that coal mining will become “Atmanirbhar” and kicked off the auction process of coal blocks for commercial mining,” Amit Gupta, Founder and CEO of Tradingbells, told Financial Express Online. “This auction was announced to be also open for foreign investors through the 100% FDI route, thereby giving a boost to Coal India share price which jumped 8% immediately following the announcement,” he added.

At 12 noon, Coal India shares were trading 5.75 per cent higher at Rs 136.95 apiece as compared to a 0.72 per cent rise in the S&P BSE Sensex. “This is a major step in the energy sector, where we were net importers until now and PM Modi announced that we would become net exporters in near future,” Gupta further said while appreciating the move. In his address, PM Modi announced an investment of Rs 20,000 crore which will be made in four coal gasification projects to convert vast resources in environment-friendly fuel. “It’s positive and step in the right direction. The GOI’s move opens up pricing and thus gives a positive spin to Coal India also,” Arjun Yash Mahajan, Head- Institutional Business at Reliance Securities, told Financial Express Online. “Though it removes Coal India’s monopoly; but free pricing, pricing as per the coal block and also market prevalent prices augurs well for Coal India. That’s why we are seeing the stock trading at Rs 139.65 level ie 8% up,” Mahajan added.

Last month Finance Minister Nirmala Sitharaman in the fourth tranche of the announcement under the Atmanirbhar Bharat Abhiyan, announced to end the government’s monopoly on coal by allowing commercial mining with an aim to introduce competition, transparency, and private sector participation through a revenue-sharing mechanism in the coal sector.

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