Coal news and updates

Ministry asks Coal India to cut e-auction vol to 25 mt

The government is asking Coal India to feed the coal-fired power projects that are reeling under severe fuel scarcity. The coal ministry is pushing CIL to nearly halve its e-auction to 25 mt in 2014-15 from 58 mt last year.

The ensuing battle for lowering the quantity of e-auction by Coal India (CIL) to benefit the power sector has taken a new turn with the coal ministry pushing CIL to nearly halve its e-auction to 25 mt in 2014-15 from 58 MT last year.

As expected the Coal India board is not in mood to listen since it will lead to a delay in production and thus hit profitability. The board will meet on August 12 to discuss the possibility of lowering e-auction quantity. E-auction has been a lucrative route for Coal India benefitting its bottomline.

But the government is asking the company to reduce selling of coal via e-auction and instead feed the coal-fired power projects that are reeling under severe fuel scarcity. Almost 50 percent of power plants have reached the critical stage with less than seven days of coal stock. This will also have an impact on steel and cement sector, which is mostly dependent on e-auctioning of coal.

The news hit Coal India stock that fell over 3 percent Coal India stock price On July 30, 2014, at 10:59 hrs Coal India was quoting at Rs 364.75, up Rs 0.35, or 0.10 percent. The 52-week high of the share was Rs 423.50 and the 52-week low was Rs 238.35.

The company's trailing 12-month (TTM) EPS was at Rs 23.76 per share as per the quarter ended March 2014. The stock's price-to-earnings (P/E) ratio was 15.35. The latest book value of the company is Rs 56.24 per share. At current value, the price-to-book value of the company is 6.49.

Source: moneycontrol