Coal India Shares Surge on First Price Increase in Two Years
Coal India Ltd. (COAL), the world’s biggest miner of the fuel, was poised for the biggest gain in more than 16 months after increasing prices for the first time in more than two years.
The shares jumped 3.6 percent to 325 rupees as of 10:19 a.m. in Mumbai, headed for their steepest jump since Jan. 13, 2012. The price increase, effective today, will add about 21.2 billion rupees ($380 million) in revenue for the year started April 1 and 25.1 billion rupees annually from the next fiscal year, the company said in a stock exchange filing yesterday, without giving details.
Higher prices will help Coal India counter an increase in wage and input costs and may allow the government to seek a higher valuation for the shares when it sells a 10 percent stake in the Kolkata-based company.
“The price increase will help the government draw investors for the share sale,” said Deven Choksey, managing director at Mumbai-based KR Choksey Shares & Securities Pvt.
The federal government, which owns 90 percent in the company, aims to raise 200 billion rupees selling a 10 percent stake in the company, according to a finance ministry draft proposal dated obtained by Bloomberg News last month.
Coal India reported a better-than-expected 35 percent jump in profit for the three months ended March 31, aided by higher shipments and a reduction in wage provisions that led to a decrease in employee costs.
To contact the editor responsible for this story: Jason Rogers at email@example.com