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Coal India share price rises 8% after PM Modi launches auction process for commercial mining

Share price of Coal India gained 7.84% intra day to Rs 139.65 compared to the previous close of Rs 129.50 on BSE

Aseem Thapliyal Last Updated: June 18, 2020 | 16:08 IST
Coal India stock rises 8% after PM Modi launches auction for commercial mining
Coal India stock is trading higher than 5 day, 20 day and 50 day moving averages but lower than 100 day and 200 day moving averages.

Coal India share price rose in trade today after PM Narendra Modi  launched the auction process for commercial coal mining. Share price of Coal India gained 7.84% intra day to Rs 139.65 compared to the previous close of Rs 129.50 on BSE.  The stock closed 6.22% higher at Rs 137.55 on BSE.

Coal India stock is trading higher than 5 day, 20 day and 50 day moving averages but lower than 100 day and 200 day moving averages.

The stock has fallen 47.07% during the last one year and declined 34.82% since the beginning of this year.  

The large cap stock has gained after 7 days of consecutive fall. Total 26.32 lakh shares changed hands amounting to turnover of Rs 35.74 crore on BSE. The stock hit 52-week low of Rs 119.25 hit on March 26, 2020 and 52 week high of Rs 265 on June 21, 2019.

Commenting on the rise in Coal India's share price despite the move of commercial mining ending the firm's monopoly, Jyoti Roy, DVP Equity Strategist, Angel Broking said, "The government's move to auction coal mines is a mixed bag for Coal India. While on one hand it would be effectively ending the company's monopoly in the sector, on the other hand the new auction process will lead to better pricing for the sector in the longer run given a move towards market linked prices. Similarly the move towards an ad valorem duty structure is also positive for the sector. The government has also set an ambitious target for increasing Coal India's production to 1 billion tonne by FY24 from 603 mn tonne in FY20 which is sentimentally positive for the stock. "

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Earlier in the day, PM Modi launched the auction process for 41 coal blocks for commercial mining, a move that opens India's coal sector for private players, and termed it a major step in the direction of India achieving self-reliance.

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, the Prime Minister said India will win the coronavirus war and turn this crisis into an opportunity, and the pandemic will make India self-reliant.

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