Coal India Liberalizes Power Sale Policy for Thermal Plants

1 min read     Updated on 07 Aug 2025, 03:04 PM
scanxBy ScanX News Team
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Overview

Coal India Limited (CIL) has announced a new policy allowing thermal power plants using CIL's linkage coal under long and medium-term fuel supply agreements to sell unrequisitioned surplus power in power markets and exchanges from August 1, 2025. This change applies to all existing and future long and medium-term power FSAs, benefiting Central and State Gencos, and independent power plants. The move is expected to increase market liquidity, stabilize prices, and improve power plant utilization. CIL currently has about 650.00 million tonnes of FSAs for the power sector this fiscal year.

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*this image is generated using AI for illustrative purposes only.

Coal India Limited (CIL), the state-owned coal mining giant, has announced a significant policy shift that could reshape the power market landscape in India. Starting August 1, 2025, thermal power plants (TPPs) using CIL's linkage coal under long and medium-term fuel supply agreements (FSAs) will be allowed to sell unrequisitioned surplus power in power markets and exchanges.

Key Policy Changes

  • Effective Date: August 1, 2025
  • Scope: Applies to all existing and future long and medium-term power FSAs
  • Beneficiaries: Central and State Gencos, as well as independent power plants

Impact on Power Market

This policy change marks a departure from the previous restrictions that limited these power plants to selling electricity only within their power purchase agreements (PPAs). The move is expected to have several significant implications:

  1. Increased Market Liquidity: By allowing surplus power to be traded freely, the policy is likely to increase the overall liquidity in power exchanges.

  2. Price Stabilization: CIL anticipates that this move will help keep spot prices in check, potentially leading to more affordable power for consumers.

  3. Improved Utilization: Power plants can now optimize their generation capacity by selling excess power, potentially improving their operational efficiency.

Background and Context

The policy change aligns with the revised SHAKTI (Scheme for Harnessing and Allocating Koyala Transparently in India) policy, reflecting a broader trend towards liberalization in India's power sector. It follows a similar move by CIL last year, which removed restrictions on coal supplies beyond Annual Contracted Quantity (ACQ) to thermal power plants.

CIL's Perspective

A senior official from Coal India Limited stated, "We have been cementing our relations with consumers consistently, and the policy facilitates the power sector to meet consistent demand of affordable power."

Current FSA Status

For the current fiscal year, CIL has approximately 650.00 million tonnes of FSAs in place for the power sector, underscoring the significant impact this policy change could have on the market.

Conclusion

This policy shift represents a major step towards a more flexible and market-driven power sector in India. By allowing power plants to sell surplus electricity in open markets, CIL aims to promote better resource utilization and potentially more competitive pricing in the power market. The full effects of this change will likely become apparent as the market adjusts to the new dynamics post-implementation in August 2025.

Historical Stock Returns for Coal India

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Coal India Reports Production and Offtake for July, Declares Interim Dividend

1 min read     Updated on 01 Aug 2025, 03:20 PM
scanxBy ScanX News Team
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Overview

Coal India Limited (CIL) has released its Q1 financial results and July production figures. Q1 saw a 4.43% decrease in revenue to ₹35,842.19 crore and a 20.19% drop in profit after tax to ₹8,734.17 crore compared to the previous year. Coal production in Q1 decreased by 3.15% to 183.32 million tonnes. The company has declared an interim dividend of ₹5.50 per share, with the record date set for August 6.

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*this image is generated using AI for illustrative purposes only.

Coal India Limited (CIL), the state-owned coal mining giant, has released its provisional production and offtake figures for July, showcasing its performance in the first month of the second quarter. The company has also announced its financial results for the first quarter of the fiscal year, along with an interim dividend declaration.

Production and Offtake Performance

CIL and its subsidiaries have reported production and offtake figures for July. While specific numbers for July were not provided, the company's performance indicates a continued focus on meeting the nation's coal demand.

Q1 Financial Highlights

Coal India's financial results for the first quarter reflect a mixed performance:

Metric Q1 Current FY Q1 Previous FY Change
Revenue from Operations ₹35,842.19 ₹37,504.00 -4.43%
Net Sales ₹31,880.43 ₹33,170.13 -3.89%
Profit Before Tax ₹11,709.15 ₹14,147.21 -17.23%
Profit After Tax ₹8,734.17 ₹10,943.55 -20.19%
EBITDA ₹11,709.00 ₹14,147.00 -17.23%
EBITDA Margin 41.00% 47.00% -6.00%

Interim Dividend Declared

In a move that will please shareholders, Coal India's Board of Directors has declared an interim dividend of ₹5.50 per equity share (55% of the face value) for the current financial year. The record date for determining the eligibility of shareholders has been set as Wednesday, August 6.

Operational Performance

While detailed operational figures for July were not provided, the company's Q1 performance shows:

Metric Q1 Current FY Q1 Previous FY Change
Coal Production 183.32 189.28 -3.15%
Coal Offtake 191.04 198.92 -3.96%
Overburden Removal 507.72 532.26 -4.61%

Note: Production and offtake figures are in million tonnes, overburden removal in million cubic meters.

Management Commentary

While specific management comments were not provided, the company's focus on maintaining strong production and offtake levels is evident from the reported figures. The declaration of an interim dividend also signals confidence in Coal India's financial position and commitment to shareholder returns.

Looking Ahead

As Coal India continues to play a crucial role in meeting India's energy needs, the company's performance in the coming months will be closely watched by industry observers and investors alike. The focus will likely remain on increasing production efficiency, improving offtake, and contributing to the nation's energy security.

Historical Stock Returns for Coal India

1 Day5 Days1 Month6 Months1 Year5 Years
+0.04%+1.93%-0.82%+2.48%-27.46%+193.77%
Coal India
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