Coal India in the red

Coal India is the top loser on the BSE currently, down almost 6% at Rs.301.90,  a tad bit better from the new 52-week low it hit today morning at Rs.300.50.

As such the market was not very happy with the company, given its inability to increase raw material prices and the ongoing tussle in the Fuel Supply Agreement (FSA) with its suppliers. Adding to the woes is todays news that the Govt is planning to go ahead with the divestment plans and is looking to raise Rs.20,000 crore from a 10% stake sale in Coal India.

After the poor response to Nalco, the marketmen are wary of this issue and expect pricing to be at a discount. The stock is expected to remain under pressure as the uncertainty over FSA continues and if it is unable to fetch a premium for its offer, downward pressure is only expected to increase.