Coal India, Vedanta, Hindalco on radar after PM launches auction process for coal blocks
The move is aimed to open India’s coal sector for private players.
By ETMarkets.com | Updated:
India must reduce coal imports, become self-reliant in energy: PM Narendra Modi
Shares of select metal and mining firms including Coal India, Hindalco and Vedanta hogged some limelight in Thursday’s trade after PM Narendra Modi launched the auction process for 41 coal blocks for commercial mining.
The move is aimed to open India’s coal sector for private players. PM Modi termed it as a major step in the direction of India achieving self-reliance.
Coal India was up nearly 6 per cent at Rs 136.80 after the announcement, while Hindalco and Vedanta traded 1.15 per cent and 3.53 per cent higher at Rs 149.70 and Rs 105.70, respectively.
On the other hand, the benchmark BSE Sensex was up 0.72 per cent at 33,750.
Launching the auction of mines for commercial mining, that is expected to garner Rs 33,000 crore of capital investment in the country over next five to seven years, PM said India will win the coronavirus war and turn this crisis into an opportunity, and the pandemic will make India self-reliant.
Analysts on Dalal Street hold a mixed view on the announcement. AK Prabhakar, Head of Research, IDBI Capital Market said, “Higher competition will increase the efficiency of Coal India.”
IIFL Securities director Sanjiv Bhasin said he is seeing buying in select PSUs including Coal India. Besides, the announcement by Prime Minister Narendra Modi is highly attractive for companies like Hindalco and Vedanta as they access coal mines now.
Modi said the launch of the auction process not only marks the beginning of unlocking of the country's coal sector from the “lockdown of decades”, but aims at making India the largest exporter of coal.
Coal and Mines Minister Pralhad Joshi said Rs 50,000 crore is being invested in the sector to increase India's coal output to 1 billion tonne.
On the contrary, G Chokkalingam, Founder, Equinomics Research and Advisory said, “The announcement is not going to benefit companies in the short term due to global recession and subdued commodity prices. I believe the response of the auction will be very lukewarm. The focus will be on utilising the existing capacity rather than investing in a new capacity of any kind. Therefore, Coal India will be a beneficiary as competition is not going to increase in the near-term.”
The move is aimed to open India’s coal sector for private players. PM Modi termed it as a major step in the direction of India achieving self-reliance.
Coal India was up nearly 6 per cent at Rs 136.80 after the announcement, while Hindalco and Vedanta traded 1.15 per cent and 3.53 per cent higher at Rs 149.70 and Rs 105.70, respectively.
On the other hand, the benchmark BSE Sensex was up 0.72 per cent at 33,750.
Launching the auction of mines for commercial mining, that is expected to garner Rs 33,000 crore of capital investment in the country over next five to seven years, PM said India will win the coronavirus war and turn this crisis into an opportunity, and the pandemic will make India self-reliant.
Analysts on Dalal Street hold a mixed view on the announcement. AK Prabhakar, Head of Research, IDBI Capital Market said, “Higher competition will increase the efficiency of Coal India.”
ADVERTISEMENT
IIFL Securities director Sanjiv Bhasin said he is seeing buying in select PSUs including Coal India. Besides, the announcement by Prime Minister Narendra Modi is highly attractive for companies like Hindalco and Vedanta as they access coal mines now.
Modi said the launch of the auction process not only marks the beginning of unlocking of the country's coal sector from the “lockdown of decades”, but aims at making India the largest exporter of coal.
Coal and Mines Minister Pralhad Joshi said Rs 50,000 crore is being invested in the sector to increase India's coal output to 1 billion tonne.
On the contrary, G Chokkalingam, Founder, Equinomics Research and Advisory said, “The announcement is not going to benefit companies in the short term due to global recession and subdued commodity prices. I believe the response of the auction will be very lukewarm. The focus will be on utilising the existing capacity rather than investing in a new capacity of any kind. Therefore, Coal India will be a beneficiary as competition is not going to increase in the near-term.”
ADVERTISEMENT
Too busy to trade in stocks? Invest in Mutual Funds with ET Money!
Bookmark or read stories offline -
Download ET Markets APP
Download ET Markets APP
ADVERTISEMENT
