Shares of the Gujarat Mineral Development Corporation jumped nearly 50 per cent during the week to Friday on firm outlook for its lignite business.
Also, the company hiked prices of lignite — a low grade coal — from January 1, 2022.
On Friday, its shares settled at Rs 111.75, up 49 per cent since the starting of the week. Over the past one-year period, it rose 90 per cent.
The state-owned company currently has five operational lignite mines located in Kutch, south Gujarat, and Bhavnagar region. It is purportedly the largest merchant seller of lignite in the country.
The company believes the government’s plan to replace captive mining policy in coal and iron ore with an open bidding one will boost domestic coal production.
The Centre had brought in The Mineral Laws (Amendment) Act, 2020, in a bid to simplify allocation of coal blocks licence-cum-mining, thereby increasing the inventory of coal, and lignite blocks.
Further, through the amendment, repetitive and redundant approval which were earlier needed for allocation or reservation of coal or lignite blocks had been done away with, besides providing flexibility to the Centre in deciding the end use of coal mines.
Incorporated in 1963, the public sector company’s current market capitalisation is Rs 3,553 crore, NSE data showed.