Markets

Coal India becomes nation's most valuable company

MUMBAI: Mining heavyweight Coal India overtook energy giant Reliance Industries on Wednesday to become India 's bigge
Published August 17, 2011

Coal_IndiaMUMBAI: Mining heavyweight Coal India overtook energy giant Reliance Industries on Wednesday to become India's biggest firm by market value, reflecting strong coal demand to power an expanding economy.

Shares of state-run Coal India, the world's largest coal miner by output, rose 2.6 percent to 397.85 rupees on the Bombay Stock Exchange, giving it a market capitalisation of 2.5 trillion rupees ($55.35 billion).

Reliance, which closed marginally down at 754.80 rupees -- a more than two-year-low -- has a market capitalisation of 2.4 trillion rupees ($54.43 billion).

Coal India, whose shares have soared on demand for coal to drive Asia's third-largest economy, reported earlier in the month a better-than-expected 64 percent jump in first-quarter net profit to 41.4 billion rupees ($912 million).

Reliance Industries' shares have fallen nearly 29 percent this year due to concerns over falling output from the main gas fields it operates in the Krishna-Godavari basin off India's eastern coast.

Coal India raised $3.4 billion in November 2010 when it sold a 10 percent stake in an initial public offering (IPO) that was hugely oversubscribed.

Its shares have climbed more than 26 percent in 2011 against an overall market that is down by nearly 20 percent.

Coal India produces more than 80 percent of India's coal at 471 mines across eight states. It also holds the largest extractable coal reserves in the world with over 22 billion tonnes, ahead of rivals China Shenhua Energy and the world's largest private miner, Peabody Energy in the United States.

Coal accounts for over half of India's energy use and consumption is set to increase as the country's economic development accelerates in energy-intensive sectors such as steel and cement manufacturing.

 

Copyright AFP (Agence France-Presse), 2011

 

Comments

Comments are closed.