Coal India shares continue weak run, here’s how much investors have lost since listing

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Published: February 13, 2020 12:53:12 PM

Coal India shares have burnt a deep hole in the pockets of investors who bought it during the initial days, now trading at nearly half the price it hit on the day of its listing on the stock exchanges over nine years ago.

Offtake of Coal India’s raw coal fell by 8 per cent in the quarter ended December 31, in comparison to the same period last year.

Coal India shares have burnt a deep hole in the pockets of investors who bought it during the initial days, now trading at nearly half the price it hit on the day of its listing on the stock exchanges over nine years ago. On November 4, 2010, Coal India started trading at a price of Rs 287.75 and ended the day at Rs 342. Now the stock trades at Rs 177.10. Coal India stock fell further 2 per cent on Thursday morning after its third quarter results gave little hope of reviving the share price, which is down 49.11 per cent since the day it was listed on the bourses.

Offtake of Coal India’s raw coal fell by 8 per cent in the quarter ended December 31, in comparison to the same period last year. Although, Coal India had recorded a 10 per cent jump in production in January, the weak performance in the quarter ended December 31 failed to revive the stock price which is down 16.42 per cent just from the beginning of the calendar year.

Coal India posted its results for the December quarter on Wednesday where it reported a 14.1 per cent fall in profit from the year-ago period. Net sales dropped by 7.8 per cent in the quarter. During the quarter under review, Coal India’s production was at 147.50 million ton down from 155.97 million ton in the same quarter last year. Profit before tax fell 24 per cent on a year ago basis while expenses of Coal India increased marginally to Rs 19,267.47 crore from Rs 19,181.06 in the same period last year. Earnings before interests, tax, depreciation and amortization fell 26.8 per cent year-on-year.

According to Motilal Oswal, Coal India’s Fuel Supply Agreement (FSA) realisations were higher year-on-year on account of increased share to non-power and better grade and in the fourth quarter of this fiscal better realisations can be expected. “Production at the company’s mines has started to ramp up post heavy monsoon, and we expect offtakes to improve as power demand recovers,” said Motilal Oswal.

Meanwhile, the central government which is looking to reduce its stake in the company sold 2.91 per cent of its holdings through the sixth further fund offer of CPSE ETF Mutual Fund scheme. Government of India’s stake now stands at 66.14 per cent from 69.05 per cent. The government earned around Rs 3,100 crore from the stake sale. The Company on February 1, appointed Pramod Agrawal as Chairman-cum-Managing Director after the superannuation of Anil Kumar Jha. Coal India produces around 83% of the overall coal production in India.

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