Posted on February 28, 2025, by Niftynews
Coal India share price have surged by approximately 3% on February 28, 2025, following a significant announcement from Northern Coalfields Limited (NCL), a subsidiary of Coal India. NCL has decided to impose a new levy called the “Singrauli Punarasthapan (Rejuvenation) Charge” of ₹300 per tonne on coal dispatches from May 1, 2025. This move has led to a boost in Coal India stock price, which rose to ₹375.75 per share on the NSE.
The additional charge is expected to generate a substantial revenue boost of around ₹3,877.50 crore, according to a regulatory filing from NCL. This charge will be applied uniformly across all mines operated by NCL, which mainly serves the power and non-power sectors.
Why Coal India Share Price Increased
The price increase of Coal India shares can be attributed to the strategic move by NCL to bolster its revenue and fund essential mine rehabilitation and resettlement projects in coal-bearing regions. This move comes at a time when many of Coal India’s subsidiaries are looking for ways to strengthen their financial positions, with the additional charge expected to significantly contribute to the company’s overall earnings.
NCL, which operates primarily in Madhya Pradesh Singrauli and Uttar Pradesh Sonbhadra districts, has already produced 117 million tonnes of coal as of January 2025. This has made NCL a vital contributor to Coal India overall output.
Key Details About NCL’s Additional Charge
The newly introduced Singrauli Punarasthapan Charge of ₹300 per tonne will apply uniformly on top of the existing notified price of coal. The charge is expected to be implemented from May 1, 2025, and will impact all coal dispatches from NCL’s mines.
NCL has a significant role in India’s coal production, producing non-coking coal in a variety of grades. Around 88% of the coal produced by NCL is supplied to the power sector, which makes the company a crucial player in India’s energy landscape. NCL’s contribution accounts for around 15% of the nation’s total coal production and about 10% of the country’s total power generation.
About NCL and Its Contribution
NCL, a wholly-owned subsidiary of Coal India, is one of the largest contributors to the coal sector in India. As a Mini Ratna (Category-I) company since 2007, NCL has a significant role in supporting India’s energy needs. In FY24, NCL achieved sales of approximately 138 million tonnes of coal, contributing 18% of Coal India’s total sales volume.
NCL’s core business revolves around the production of coal in a wide range of grades and supplying these to both power and non-power sectors. The company is now looking to increase its revenue by implementing new charges like the Singrauli Punarasthapan Charge, which is expected to help finance key rehabilitation and resettlement efforts.
Coal India Market Position and Financial Health
Coal India Limited (CIL), established in 1975, is the state-owned coal mining giant that dominates India’s coal production. As a Maharatna company, CIL is recognized for its scale and strategic importance. The company operates through seven major subsidiaries, including NCL, and has a significant role in ensuring India’s energy security.
Despite recent challenges, including a 16% fall in Coal India share price over the past 12 months and a 30% decline over the past six months, Coal India move to increase revenue through strategic charges like the one imposed by NCL could help improve its financial outlook.
What’s Next for Coal India?
While Coal India share price has seen a decline over the past year, the move by NCL to impose the new charge may help improve its revenue streams. Investors will be keenly watching the company’s upcoming quarterly reports to gauge the impact of the additional charge on the company’s earnings and stock performance.
This move by NCL aligns with broader efforts by Coal India subsidiaries to ensure sustainable growth while managing operational and environmental challenges in India’s coal-producing regions.
Conclusion: Coal India Future Outlook
The rise in Coal India share price following the announcement of the Singrauli Punarasthapan Charge reflects investor optimism about the company’s ability to generate additional revenue. As NCL aims to support rehabilitation and resettlement efforts, Coal India position in the market is likely to remain strong, provided the additional charge has the desired impact on revenue. Investors should keep an eye on Coal India performance in the coming months, particularly as the charge takes effect in May 2025.