News Detail

• The decision by Coal India Ltd (CIL) to move to a quality based pricing regime translated into handsome gains for its stock on Monday even though the company is still unsure about the quantum of revenue growth according to the new system.The CIL stock on Monday closed with a gain of 3.61 per cent at 7311.70 on the Bombay Stock Exchange (BSE) while the stocks of some cement and thermal power firms underwent selling pressure due to fear of rising fuel cost.Grasimwas down 3.24 per cent to close at 72,427.30, UltraTech was down by 0.71 per cent at 71,152. But other cement firms including India Cement, ACC and Ambuja Cement closed with gains.

• Among thermal power firms NTPCwas down 1.55 per cent to close at 7158.15, Reliance Power was down 1.20 per cent at 770.15, GMR Infra was down 3.35 per cent to close at 720.30 and CESC was down 0.25 per cent to 7202.90.However, other power company stocks, such as Tata Power, Lanco, GVK, JSW Energy, Jindal Steel & Power and Adani Power closed in the positive zone.However, stocks of steel companies, whose fuel cost is also expected to go up did not witness any pressure at the bourses.According to the new system, CIL would dig out more of quality coal from its mines rather than inferior quality coal.

• "It is difficult to assess the exact impact as it will be based on the caloric value," the firm added.The coal ministry had in the last week stated that the new pricing mechanism would not escalate prices of non-coking coal significantly as bulk of the coal from CIL would be supplied at a substantial discount up to 77 per cent for power producers and up to 66 per cent discount for other consumers.Analysts have ruled out any immediate hike in power tariffs.

Source