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Coal India revises up FY21 capex by 30 pc to Rs. 13,000 crore

IBEF:  January 14, 2021

On Wednesday, state-owned Coal India stated that it had raised its capital expenditure (capex) budget by an additional Rs. 3,000 crore (US$ 409.98 million) for the current budget, upgrading it to Rs. 13,000 crore (US$ 1.78 billion). The growth in capex comes at a time when central public sector undertakings (PSUs) have been directed by the government to step up their capex to boost economic activity.

This indicates a 30% improvement over the initial 2020-21 CIL capex goal of Rs. 10,000 crore (US$ 1.37 billion).

South Eastern Coalfields Ltd, CIL's largest coal generating subsidiary, accounts for Rs. 800 crore (US$ 109.33 million) out of the added Rs. 3,000 crore (US$ 409.98 million) capex budget followed by CIL headquarters with Rs. 585 crore (US$ 79.95 million) and Mahanadi Coalfields Ltd with Rs. 550 crore (US$ 75.16 million).

Central Coalfields Ltd (CIL) is taking up Rs. 460 crore (US$ 62.86 million).

In the first nine months of FY21, CIL reported a 166% increase in its capex to Rs. 7,801 crore (US$ 1.07 billion).

The real spending increased by Rs. 4,871 crore (US$ 665.67 million) in the corresponding period of FY21 compared to Rs. 2,930 crore (US$ 400.42 million) capex logged by the company in April-December 2019-20.

Between April to December of FY21, CIL used 78% of its total original capex budget.

By the closure of December, CIL was directed by the government to achieve Rs. 7,500 crore (US$ 1.02 billion) capex utilisation, against which the actual use of capex was Rs. 7,801 crore (US$ 1.07 billion), which is Rs. 301 crore (US$ 41.13 million) more.

At Rs. 2,778 crore (US$ 379.64 million), CIL's capex also reported a solid 90% growth for the current year's Q3, ending December 2020, compared to Rs. 1,463 crore (US$ 199.93 million) for the same quarter last year. During the third quarter, the rise in spending was Rs. 1,315 crore (US$ 179.71 million).

CIL reported 312% growth in capex in the second quarter of FY21, while development was 86.5% in the first quarter.

CIL's capex makes it one of the biggest spenders among the Indian PSUs in FY21, the company said.

In order to achieve the revised goal of Rs. 13,000 crore (US$ 1.78 billion) in the current FY (financial year), CIL will be closely monitoring the progress of capital spending, it said.

About 80% of domestic coal output is contributed by the CIL.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.