The total coal allocation under its Coal India’s four e-auction windows registered about 65 per cent year-on-year rise during the first half of the current financial year.
“Coal India Ltd (CIL) booked 41.4 million tonnes (MT) raw coal in e-auctions during April-September 2020, compared with 25.1 MT booked in the corresponding period last fiscal,” the company said in a statement.
In volume terms, the increase was 16.3 MT, it added.
Cash crunch has been a major challenge to Coal India (CIL) with net cash flows from operations falling drastically. Coal India anticipated the liquidity crunch that COVID-19 would bring to its customers and brought down the reserve price close to zero to help them lift more coal during the lockdown phase, the company statement said.
The company is in a bid to recast its e-auction sales since it has the widest possibility to bring in some immediate cash. The CIL board has decided to put the reserve price for October auctions higher by 10% of the notified price, changing the last six month’s practice of setting the reserve price at the notified price.
This would bring the floor or the reserve price to a level of the average premium price that the e-auctions fetched in the last six months. The average premium fetched was 10% from the e-auctions for the six months this fiscal against an average 48%, it fetched during the corresponding period last fiscal.
With the industrial and commercial activities reviving after the unlock, CIL is hopeful that the demand sustains and the sales get boosted soon. With no dearth of coal, the company is confident of meeting the increased demand, it said. Last year’s coal import trend showed that 40 per cent of the imports of dry-fuel were by traders.
CIL decided to give more thrust in auction sales that resulted in higher volumes. This is also in line with the government’s push on ‘Atmanirbhar Bharat’ in the energy sector, it said.
The power sector showing signs of recovery registering double-digit growth in the first week of October bodes well for us to ramp up our sales, the firm said. The power sector is CIL’s major coal-consuming customer accounting for around 80 per cent of its entire sales.