Coal India to tweak its e-auction norms

In a bid to meet local coal demand fully that is existing in the market, Coal India Limited (CIL) has taken steps to ease the norms in e-auctions like lowering the earnest money deposit (EMD) and ramping up the quantities offered under the auction hammer. Presently, CIL operates only a single window mode agnostic e-auction scheme, where consumers can opt their own preferred mode of coal transport.

This aside, the company is also planning a revamp of its auction and allocation methodology under its electronic window. A concept note has been circulated to eauction bidders on 11 July to seek their feedback. Among others, some of the changes contemplated are a three-hour auction window replacing the earlier long drawn process; allowing the consumers to change their mode of transport from rail to road post bidding without additional premium; allowing a single bidder to place a maximum of four bids against each basket which earlier was restricted to one bid.

Though CIL is already supplying improved quantities of coal as is evident by its loading, the company intends to step in to meet any latent demand as well. From CIL's sidings alone the rake loading on an average was 316.7/day in the current fiscal year with a jump of 40 rakes/day over same period last year.

The move to lower EMD in e-auctions by more than a third from Rs.500 per ton of coal to Rs.150 per ton is to encourage increased participation, as blocked capital of consumers will be eased. With more cash availability at their disposal consumers could switch over to more auctions with the same capital.

CIL has asked all its subsidiary companies, except Northern Coalfields Limited, to spike up their offer quantity under e-auction to 40% of their respective total production for the second and third quarters of FY 2025.

Generally, coal is supplied to consumers at notified prices. Reserve price in e-auction means the price that is arrived at, after adding on a certain percentage to notified price of coal. Now, subsidiaries have been given flexibility to fix their reserve prices taking into account different factors like local demand-supply scenario from different sources, optimize various modes of loading particularly road mode available with the coal company, coal stock at mine and level of booking in earlier-e-auction.

Coal stock at thermal power plants is at nearly 45 MTs which is about 33% more compared to same period last year. CIL's intention is to supply coal to meet the full domestic demand and cater any latent demand as well that may exist in the system.

Shares of Coal India Limited was last trading in BSE at Rs. 500.20 as compared to the previous close of Rs. 490.45. The total number of shares traded during the day was 815768 in over 12816 trades.

The stock hit an intraday high of Rs. 506.05 and intraday low of 489.90. The net turnover during the day was Rs. 409239571.00.

Source : Equity Bulls

Keywords

CoalIndia INE522F01014 eAuction Norms Tweaking