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 Ltd    COALINDIA   INE522F01014

COAL INDIA LTD (COALINDIA)

End-of-day quote. End-of-day quote  - 12/02
305.65 INR   -0.26%
12/02 INDIA TO REQUIR : Govt
12/02 COAL INDIA : production increases 5.3% in November
12/02 COAL INDIA : moves higher after reporting production, offtake number..
SummaryQuotesChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsSector news 

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 CET

--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; saurabh.chaturvedi@dowjones.com

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on COAL INDIA LTD
12/02 INDIA TO REQUIRE 884.87 MT OF COAL I : Govt
12/02 COAL INDIA : production increases 5.3% in November
12/02 COAL INDIA : moves higher after reporting production, offtake numbers
11/24 COAL INDIA : Singareni Collieries to supply coal to Tamil Nadu power projects
11/22 COAL INDIA : Demonetisation hits coal e-auction for traders and small companies
11/22 COAL INDIA : Cil explores export of coal
11/21 Live Stock Market Updates - Sensex Nifty is in red, Telecom, Oil & Gas and Me..
11/18 COAL INDIA : imports decreases from 217.78 Mte in 2014-15 to 199.88 Mte in 2015-..
11/18 COAL INDIA : No power producer sought imported coal from cil
11/10 COAL INDIA : Hella presents innovative lighting solutions at imme 2016 kolkata
More news
Sector news : Coal - NEC
12/01DJGLENCORE : to Resume Dividend With $1 Billion Payout Next Year
11/17DJInternal Probe Over Payments Led Rio Tinto to Fire Top Officials
11/17 FTSE rises, though Royal Mail lags after results
11/16DJGlencore's KCC Made Undisclosed Payments to Firm of Businessman in Congo Oper..
11/10DJCarlyle Hedge Fund's $400 Million African-Refinery Investment Disappears
More sector news : Coal - NEC
Advertisement
Financials ( INR)
Sales 2017 814 256 M
EBIT 2017 144 403 M
Net income 2017 138 313 M
Finance 2017 303 003 M
Yield 2017 6,32%
P/E ratio 2017 13,91
P/E ratio 2018 12,21
EV / Sales 2017 1,96x
EV / Sales 2018 1,75x
Capitalization 1 898 536 M
More Financials
Chart COAL INDIA LTD
Duration : Period :
Coal India Ltd Technical Analysis Chart | COALINDIA | INE522F01014 | 4-Traders
Full-screen chart
Technical analysis trends COAL INDIA LTD
Short TermMid-TermLong Term
TrendsBearishNeutralNeutral
Technical analysis
Income Statement Evolution
More Financials
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 33
Average target price 349  INR
Spread / Average Target 14%
Consensus details
EPS Revisions
More Estimates Revisions
Managers
NameTitle
Sutirtha Bhattacharya Chairman, Chief Executive Officer & MD
Chandan Kumar Dey Chief Financial Officer & Executive Director
R. Mohan Das Executive Director & Personnel Director
Khanindra Pathak Independent Director
D. C. Panigrahi Independent Director
More about the company
Sector and Competitors
1st jan.Capitalization (M$)
COAL INDIA LTD-6.58%27 907
GLENCORE PLC207.14%50 368
CHINA SHENHUA ENERGY C..14.36%48 077
CHINA COAL ENERGY COMP..3.31%10 256
SHAANXI COAL INDUSTRY ..14.20%7 918
WINTIME ENERGY CO LTD-8.18%7 636
More Results