News Detail

News:

Every coal consuming sector will be earmarked definite volumes of the fossil fuel which would then be offered only to companies in the segment through forward auction. 

Source: ET

SNP Insight:

The demand driven “supplier- controlled ascending market clearing auction” model may have both positive and negative effect on both coal supplier and procurer. But it may at large impact the gross profit of the metal manufacturing companies. As there may be large chance that the auctioned linkage coal price will go up in this forward bidding process. So companies like NALCO, Adity Birla and Vendanta may feel the impact as large portion of their coal requirement is full filled by coal linkages. Also the falling metal price also adds more stress on the profitability of the metal manufacturing companies.

Source: SNP Infra Research