Shares of Coal India cracked nearly 5 per cent in Monday’s trade after Finance Minister Nirmala Sitharaman on Saturday announced commercial mining of coal by the private sector, ending government's monopoly.
The scrip traded 4.86 per cent down at Rs 123.20 on the BSE.
In her fourth tranche of the economic package, FM said commercial mining will be done on revenue sharing mechanism instead of the regime of fixed rupee/tonne.
Nearly 50 blocks will be offered for bidding, she said.
This is being done to reduce import of substitutable coal and increase self-reliance in coal production.
“Coal India will see an increase in the competition and remove its monopoly. This will reduce import of coal and increase self- reliance on coal production,” IDBI Capital Markets said.
Also, the government will invest Rs 50,000 crore for building evacuation infrastructure.
Coal gasification and liquefication will be incentivised through rebate in revenue sharing, she said adding coal bed methane (CBM) production would also be encouraged.