Coal India jumps on buzz of likely FDI in coal sector

Coal India jumped 4.97% to Rs 390.65 at 13:44 IST on BSE on reports that the newly elected PM designate Narendra Modi is exploring to break up the company and opening up the sector to foreign investment.

Meanwhile, the BSE Sensex was up 183.55 points, or 0.76%, to 24,481.57.

On BSE, so far 11.04 lakh shares were traded in the counter, compared with an average volume of 3.91 lakh shares in the past one quarter.

The stock hit a high of Rs 401 so far during the day, which is also a 52-week high for the counter. The stock hit a low of Rs 378.20 so far during the day. The stock hit a 52-week low of Rs 215.47 on 30 August 2013.

The stock had outperformed the market over the past one month till 21 May 2014, rising 25.62% compared with 6.73% rise in the Sensex. The scrip had also outperformed the market in past one quarter, rising 48.15% as against Sensex's 17.38% rise.

The large-cap coal miner has an equity capital of Rs 6316.36 crore. Face value per share is Rs 10.

According to reports, Prime Minister-elect Narendra Modi is exploring breaking up state behemoth Coal India and opening up the sector to foreign investment to boost output and cut imports.

Modi reportedly wants to fix the coal sector quickly to ensure unbroken electricity supply across the country. Coal generates more than half of India's power and is the cheapest form of energy.

There is a possibility of converting various units of Coal India into independent companies, and making respective state governments equity holders to help speed up land acquisition and other such processes, reports suggested.

Apart from using modern mining technologies to boost efficiencies and convert challenging mines into modern mines, the government will also explore international private-sector partnership in a significant way, reports added.

Coal India's consolidated net profit fell 11.4% to Rs 3894.09 crore on 2.3% fall in total income to Rs 19110.74 crore in Q3 December 2013 over Q3 December 2012. The company will announce Q4 results on 29 May 2014.

Coal India is the largest coal producer in the world.

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