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Bidding for Coal Blocks to be Rational: Bidders to Bid Wisely!!!

News:

The latest round of coal block auctions on Tuesday may see a drastic fall in bid rates compared with the bids made just a few months ago, showing a dramatic shift in the circumstances and sentiments surrounding natural resource auctions, one of the most ambitious projects of the National Democratic Alliance government.

Source:- live mint

SNP Insight:

The bidders are expected to bid rationally for the coal blocks this time as compared to the agressive bidding experienced in the previous coal block allocation process, as the global coal prices are coming down and demand supply gap of the coal  is narrowing. The lower bids may slash down govt's revenue, further it would not impact the winner's balance sheet to the extent it did in the previous rounds, where agressive bidding was done by the bidders which resulted into enourmous losses.

Source:- SNP Infra Research