Shares of Hindalco Industries and Vedanta advanced after both these companies won coal mines on the first day of the e-auction where non-state companies could bid for coal mining rights.
Shares of Hindalco Industries gained 4.24% to Rs 178.05. Vedanta rose 0.42% to Rs 95.10.India's Ministry of Coal had launched the auction of coal mines for commercial mining on 18 June 2020 pursuant to a two stage forward auction process wherein the bidders have to bid for the percentage revenue share over the reserve price. The Day 1 of e-auction on 2 November 2020 witnessed strong competition, with auction of some of the mines going on for more than 3-4 hours.
The Ministry said that in all the mines auctioned, the final offer received is above 10% signalling strong demand of coal mines in the market.
Vedanta won one of the largest mines on offer, the Radhikapur mine in Odisha that has a capacity of 6 million tonnes per annum. Vedanta's percentage share of revenue bid was 21%. The expected revenue from the coal mine is Rs 592.28 crore.
Hindalco Industries won the bid for the Chakla mine in Jharkhand. This mine has a capacity of 5.3 million tonnes per annum. Hindalco's percentage share of revenue bid was 14.25% with an expected revenue of Rs 519.54 crore.
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