Shares from steel, power and mining sector gained in trade today after the government opened up coal mining to non-coal companies and removed restriction on end-use of the fuel. The government will amend the current provision in the law through an ordinance that allows only companies in coal mining to bid for coal mines. After the approval, any company meeting the minimum criteria will now be allowed to bid for coal mines. As many as 40 coal blocks will be put up for auction in the new round. India's mining sector is just 3% of GDP.
Cabinet also approved change in the law to boost foreign direct investment in coal mining. This move will help bring in large international miners to the sector with the latest technology and raise coal production.
Following the development, stocks of steel manufacturing sector, that uses imported coal as manufacturing input rose in trade today. Welspun Corporation rose 5.4% intraday, JSW Steel rose 4.33%, followed by 2.7% intraday rise in JSPL and 2.2% gain in SAIL and Tata Steel each.
Shares of power sector such as Adani Green Energy rose 4.98%, 3.51% gain in Adani Transmission, 2.84% rise in Tata Power, followed by 1.34% rise in Adani Power, 1% rise in Power Grid Corporation and NTPC rising 0.3%. Shares of Coal India were trading marginally lower on Thursday.
From the mining sector, 20 Microns shares grew 5.5% intraday, Ashapura Minechem climbed 4.3%, Sandur Manganese rose 3.57% and ASI Industries rose 2.6%. Shares of other state-owned mineral and mining companies such as GMDC climbed 4%, followed by 2.6% in KIOCL.
By Rupa Burman Roy