Coal India Share Price Gained Over 3% Amid Market Decline: What’s Driving This

Market Performance

Despite a significant downturn in the broader equity market, Coal India shares registered a gain of over 3% on February 28, 2025. The Indian stock market witnessed a sharp drop, with benchmark indices Sensex and Nifty 50 dropping more than 1% each. The Sensex fell by over 1,000 points, and the Nifty 50 slipped below the 22,250 mark, resulting in a market value erosion exceeding ₹6 lakh crore.

Key Development

Coal India's stock price rise is linked to a recent announcement by its subsidiary, Northern Coalfields Ltd. The subsidiary declared the implementation of an additional charge on coal dispatches. This newly introduced levy, the 'Singrauli Punarasthapan Charge,' amounts to ₹300 per tonne and will apply to all its coal sales starting May 1, 2025.

Financial Impact

Coal India disclosed through a regulatory filing on February 27 that the expected additional revenue from this charge is estimated to be around ₹3,877.50 crore. Northern Coalfields Ltd, the third-largest subsidiary of Coal India, recorded sales of approximately 138 million tonnes in FY24, contributing 18% to the company's total sales volume.

Revenue Projection

• Revenue: Additional inflow of approximately ₹3,877.50 crore from the new levy.
• Sales Volume: Northern Coalfields Ltd contributed about 138 million tonnes in FY24.
• Implementation Date: May 1, 2025.

Utilization of Additional Revenue

The newly generated cash inflow is expected to support land acquisition and rehabilitation initiatives in the Singrauli mining region over the coming years.

Conclusion

Coal India's stock performance stood out amid a broader market downturn due to the announcement of an additional charge on coal dispatches. This levy's anticipated revenue will likely aid future operational and developmental projects. As the company moves forward with this pricing adjustment, its financial outlook remains influenced by production volumes and market conditions.