Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  Equities  >  NATIONAL STOCK EXCHANGE OF INDIA  >  Coal India    COALINDIA   INE522F01014

COAL INDIA (COALINDIA)
Mes dernières consult.
Most popular
  Report  
SummaryQuotesChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsofficial PublicationsSector newsTweets

India Power Producers May Seek Higher Penalty On Coal India

share with twitter share with LinkedIn share with facebook
share via e-mail
0
04/17/2012 | 03:44pm CEST

--Higher penalty will ensure increased coal supplies by Coal India, power companies say

--Higher supplies from Coal India essential to meet electricity generation targets

--Some companies expect government directives to be enough to push Coal India to raise supplies

(Recasts first paragraph, adds Coal India share price in 6th paragraph, background and context in 2nd to 5th paragraphs, comments from power companies in 8th-12th, 14th and 15th paragraphs)

By Saurabh Chaturvedi

Of

Major Indian power producers said Tuesday they may seek the federal government's intervention to levy higher penalties on Coal India Ltd. (533278.BY) if the state-run miner fails to meet its supply obligations.

Coal India, the world's largest producer, late Monday agreed to sign fuel-supply agreements with some new power projects within a week but diluted its penalty obligations. The move came after the offices of Prime Minister Manmohan Singh and President Pratibha Patil issued directives to the company to ensure adequate supplies to utilities, though the miner was given a free hand in deciding on penalties.

The government is concerned that any shortfall in supplies by Coal India will have wider ramifications for the economy as the company meets more than 80% of the nation's requirement and because more than half of India's 200 gigawatt power generation capacity runs on coal.

Some power producers are also increasing coal imports as output at Coal India has remained stagnant for the past two years due to delays in environment clearances, heavy rainfall and frequent labor strikes.

Coal India said Monday it will sign supply pacts with power projects that became operational by the end of December and have a total generation capacity of about 28 gigawatt. The pacts stipulate that, if Coal India fails to supply at least 80% of the annual contracted coal, it will pay 0.01% of the value of the shortfall as penalty. That's down sharply from the 40% penalty it is mandated to pay under existing contracts.

Shares of Coal India Tuesday gained 3.2% to INR350.00 in a Mumbai market 1.2% higher as investors cheered news of lower penalty.

But power producers are miffed.

"The company has failed to understand the spirit and intent of the [government] directive," said Ashok Khurana, director general of the Association of Power Producers, which represents private-sector utilities including Tata Power Co. and Reliance Power Ltd.

Jindal Power Ltd. Managing Director R.S. Sharma and GVK Power & Infrastructure Ltd. (532708.BY) Chief Financial Officer Isaac George said they will ask the government to implement tougher penalties on Coal India. George added that such pacts were "unfair."

Jindal Power, a wholly owned unit of Jindal Steel & Power Ltd. (532286.BY), has a generation capacity of about three gigawatt, which it aims to raise to five gigawatt by 2015. GVK Power is building 2.8 GW electricity generation capacity.

Some utilities are, however, hoping that Coal India will boost supplies.

"We should think positive and expect Coal India to meet its fuel supply agreement targets," NTPC Ltd. (532555.BY) Chairman Arup Roy Choudhury said.

State-run NTPC, India's largest power producer, plans to almost double its electricity generation capacity to 66 GW by March 2017.

Gagan Banga, a spokesman for the Indiabulls group, which is building more than five gigawatt of power projects, agreed with Choudhury.

Banga said that the supply pacts can't just be "a hogwash" as Coal India is acting on a presidential directive and that he thinks the company will work toward meeting the supply commitment.

The government directive to Coal India has also raised concern among some minority shareholders. U.K.-based The Children's Investment Fund Management has opposed the government clauses on assured supplies to customers saying these were against the interest of Coal India given the slow growth in its output. It didn't immediately reply to an email from Dow Jones Newswires seeking comment for this article.

Kameswara Rao, executive director and leader of the energy, utilities, and mining vertical at PricewaterhouseCoopers India, said Coal India has to balance the interest of the Indian government, which is its majority shareholder, and also its minority stakeholders.

"As a listed company Coal India needs to consider broader investor interest," Rao said. "But with the government being the single-largest shareholder, it needs to balance both issues."

-By Saurabh Chaturvedi, Dow Jones Newswires; +91-11-4356-3304; [email protected]

Stocks mentioned in the article
ChangeLast1st jan.
COAL INDIA -1.60% 267 End-of-day quote.2.66%
JINDAL STEEL & POWER -3.54% 246.85 End-of-day quote.20.41%
NTPC LTD -0.57% 166.4 End-of-day quote.-5.64%
RATTANINDIA POWER LTD 0.00% 4.6 End-of-day quote.-41.40%
RELIANCE POWER -5.06% 33.8 End-of-day quote.-32.87%
TATA POWER COMPANY -1.23% 80.4 End-of-day quote.-13.92%
share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on COAL INDIA
05/20COAL INDIA : Mahanadi Coalfields CMD AK Jha takes over as Coal India chief
AQ
05/17COAL INDIA : Government allows one-time coal linkage rationalisation for power p..
AQ
05/14COAL INDIA : CIL asks Railways Ministry to come up with a roadmap for coal evacu..
AQ
05/14COAL INDIA : Wants own rail network
AQ
05/12COAL INDIA : Assurance of Sustainability Report
AQ
05/07Indian investments in south africa touch $4 billion
AQ
05/07COAL INDIA : Cil supplies to plants up 14%
AQ
05/03COAL INDIA : Production and offtake of coal by coal india
AQ
05/02COAL INDIA : achieves 95% of production target for FY18
AQ
05/01COAL INDIA : Cil seeks views on pricing policy
AQ
More news
Financials ( INR)
Sales 2018 836 B
EBIT 2018 119 B
Net income 2018 102 B
Finance 2018 246 B
Yield 2018 6,47%
P/E ratio 2018 16,06
P/E ratio 2019 11,27
EV / Sales 2018 1,72x
EV / Sales 2019 1,59x
Capitalization 1 685 B
Chart COAL INDIA
Duration : Period :
Coal India Technical Analysis Chart | COALINDIA | INE522F01014 | 4-Traders
Technical analysis trends COAL INDIA
Short TermMid-TermLong Term
TrendsBearishNeutralNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 27
Average target price 332  INR
Spread / Average Target 24%
EPS Revisions
Managers
NameTitle
Suresh Kumar Chairman & Managing Director
Chandan Kumar Dey Chief Financial Officer & Executive Director
Shekhar Saran Independent Director & Director-Technical
Binay Dayal Technical Director
Khanindra Pathak Independent Director
Sector and Competitors
1st jan.Capitalization (M$)
COAL INDIA2.66%24 777
GLENCORE-2.47%77 389
CHINA SHENHUA ENERGY COMPANY LIMITED-3.67%67 230
SHAANXI COAL INDUSTRY CO LTD3.80%13 863
YANZHOU COAL MINING CO LTD7.37%10 240
CHINA COAL ENERGY COMPANY-7.34%9 539