Mining stocks are trading strong led by Sesa Goa and Guj NRE Coke. According to a leading financial daily, the government's decision to put 8.5 billion tonne (bt) coal reserves up for auction has kicked off a frantic rush among companies, including Coal India and National Thermal Power Corporation (NTPC), scrambling to grab the natural resource. These firms are lured by the Deocha Pachami block in West Bengal's Birbhum district which is the country's largest thermal coal block with over 2 bn tonne reserves. Earlier, National Mineral Development Corporation (NMDC) was seeking the block's allocation for the past three years. It had chalked out a Rs 100 bn plan to develop the block in a joint venture with Coal India. But now Coal India wants to exploit the reserves alone.
Aluminium stocks are trading in the green led by Hindalco and National Aluminium Company Ltd. (NALCO). According to a leading financial daily, a joint venture between Nalco and Nuclear Power Corporation of India Limited (NPCIL) called NPCIL- Nalco Power Company Limited which was formed to set up nuclear plants is planning to raise a term loan of up to Rs 15 bn over the next three months to fund the construction of power generation capacities. According to the joint venture agreement, Nalco currently holds 26% stake in the company with an option of taking it up to 49%. The rest is with NPCIL. The joint venture is exploring other options such as a bond issue or external commercial borrowings (ECBs) as well. The companies are yet to decide on the quantum of the bond or ECB issue. Since the earnings of the power plants will be in Indian rupees, the two will have to set up a hedging mechanism in case of ECB borrowings. Nalco-NPCIL joined hands to build nuclear power plants in March last year. The power plants are coming up in Surat, Gujarat.