Mumbai: Shares of Coal India Ltd (CIL) fell more than two percent in the morning trade following a Presidential directive to the company to commit fuel supplies to power companies.
The government yesterday issued the directive to CIL to sign fuel supply agreements (FSAs) with power producers assuring them of at least 80 percent of the total committed coal delivery.
The move was announced after the market hours, and this morning CIL shares opened weak and then fell 2.26 percent to an early low of Rs 335 on the BSE. It was later trading at Rs 341.40, down by 0.39 percent on the BSE at 1057 hours.
Similar movement was seen on the National Stock Exchange, where the stock opened at Rs 337, then fell to a low of Rs 334.60. The stock was later trading at Rs 341.45, down 0.54 percent on the NSE at 1058 hours.
The directive has been given to the PSU, as it did not meet the deadline of March 31, set by the Prime Minister's Office for CIL to enter into agreements with power producers which are facing fuel crunch.
While the power producers welcomed the decision, analysts said CIL may stand to lose heavily in case it falters on its commitment to supply fuel to the energy firms.