Coal India shares in focus after signing Rs 16,500-cr power project deal in Jharkhand

Shares of state-run Coal India will be in focus on Tuesday after the company announced that it has entered into an agreement with Damodar Valley Corporation (DVC) to jointly establish a coal-based power plant in Jharkhand, involving a total investment of Rs 16,500 crore.

The plant will have two 800 MW units and will be an expansion of an existing 500 MW plant.

Expanding its footprint in thermal power generation, Coal India said it has formally partnered with DVC to develop a 2x800 MW ultra-supercritical thermal power project. The plant will be a brownfield expansion of the existing Chandrapura Thermal Power Station, which currently runs at a capacity of 2x250 MW.


The proposed project will be developed under a joint venture, with both entities holding an equal 50% equity stake. Coal for the plant will be sourced from nearby coalfields operated by CIL subsidiaries — Bharat Coking Coal Ltd (BCCL) and Central Coalfields Ltd (CCL).

The non-binding Memorandum of Understanding (MoU) was signed in Kolkata on Monday in the presence of CIL Chairman P.M. Prasad and DVC Chairman S. Suresh Kumar. The pact was inked by Debasish Nanda, Director (Business Development) at CIL, and Swapnendu Kumar Panda, Member (Technical) at DVC.

Coal India share price

The company’s shares fell 8% and underperformed its sector by 15% in the past year. Meanwhile, the stock has offered 94% and 188% returns in the last three and five years, respectively. According to Trendlye, Coal India has worse one year returns than Nifty50, Sensex, industry, and sector.