Coal India Boosts Capital Expenditure, Targets Aggressive Investment In FY24
In a bid to bridge the investment gap and accelerate its growth trajectory, state-run Coal India announced a robust 7.6 per cent year-on-year increase in its capital expenditure (capex) for the April-November period, reaching Rs 10,492 crore. This uptick in spending reflects the company's intensified efforts to bolster its infrastructure and contribute significantly to economic development.
The company has strategically allocated a substantial portion of its targeted capex for the fiscal year 2023-24, amounting to Rs 16,500 crore, towards transport infrastructure projects. A notable Rs 6,441 crore has been earmarked for these initiatives, showcasing a commitment to advancing critical aspects of the coal supply chain.
A senior executive emphasised the company's dedication to achieving approximately 80 per cent of the total targeted capex by the end of the third quarter in December. The focus on timely execution underscores Coal India's determination to drive impactful investments and foster sustainable growth.
The diversified nature of the investments includes a significant allocation of Rs 2,486 crore for land acquisition and related rehabilitation. Procurement of heavy earth-moving machinery constitutes Rs 1,954 crore of the capex, while ventures into emerging sectors like solar power and joint collaborations with Hindustan Urvarak Rasayan Ltd and Talcher Fertilisers Ltd have accounted for Rs 1,040 crore.
The executive stated, "Capital expenditure is important for asset creation and future revenue," highlighting the pivotal role these investments play in shaping the company's long-term prospects.
Coal India, as the largest contributor to domestic coal output, plays a critical role in meeting the energy needs of the nation. The additional capex has been strategically deployed for mine development, exploration, and prospecting, among other essential aspects of the coal industry.
This substantial increase in expenditure marks a departure from the previous norm, reflecting a notable shift from Rs 6,000-7,000 crore. The surge observed in FY22, reaching Rs 13,284 crore, was attributed to the economic rebound following the pandemic-induced slowdown.
As the growth trend continues, Coal India anticipates surpassing its capex target for the fiscal year, extending a trend observed in the last three years. Despite a marginal 1.75 per cent dip, with shares closing at Rs 347.55 apiece on the BSE on Tuesday, the company remains optimistic about its strategic investments yielding positive results in the near future.
