CIL sets new milestone for e-auction sales in FY ’21

Coal India Ltd has attained a new high in terms of coal allocation under auction scheme for FY ’21. The miner registered booking of 124.04 mn t coal thus eclipsing the previous record of 113.6 mn t achieved in FY ’17.

Concentrated efforts to bolster sales volume paid off at a time when the company had accumulated surplus coal inventory at pitheads. Notably, coal offered under the various auction windows recorded at 507.35 mn t in FY ’21 saw an exponential growth of 435% compared with 94.76 mn t in FY ’20.

Although, growth in coal booking was 88% y-o-y compared with 66.03 mn t in FY ’20, quantity allocated with respect to the bulk volume being offered remain modest due to the difficult market condition induced by COVID-19. The auction sale was recorded at 24% this term compared with 70% allocation seen in the previous fiscal.

Moreover, higher availability than demand also affected CIL’s earning though these auctions at a time when several relief measures were kept in place to ease financial burdens of customers. Premium fetched over the notified price came down to 17% for overall auction sales in FY ’21 compared with 47% recorded in FY ’20.

It is pertinent to note that reserve price in auction was reduced to zero during the first half of FY ’21. It was only in Oct ’20 that the company had restored add-on over notified price.

Greater urgency from non-power sector:

Often, the non-power sector has been preferred next to the power sector for CIL’s coal supplies. However, with higher coal availability, this sector showed a tendency to lift more coal via auction route.

Allocation in exclusive auction entitled specially for non-power sector increased to 31.23 mn t in FY ’21 logging an exponential growth of 289% compared with 8.03 mn t in FY ’20.

In order to reduce imports, CIL introduced a new auction outlet called ‘special spot for coal importers’ in Oct ’20. Reflecting a positive response from importers, the company managed to sale 7.53 mn t coal under this scheme, which was higher than allocation of 3.45 mn t recorded under the usual version of special spot auction.

Scheme-wise Auction Summary for FY ’21

Quantity in Million Tonnes

Going forward, CIL is expected to rely on auction in order to liquidate the excess stock which has risen close to 100 mn t at the end of fiscal. In particular, additional volume are likely to be offered under special forward auction to cater the peak summer demand of power plants.