Consumers book 100 per cent of the quantity offered by CIL under the recently revamped single window e-auction

Coal India Ltd’s (CIL) first ever offer of nearly 5.2 lakh tonnes (lt) of coal under the recently revamped single window e-auction saw coal consumers booking 100 per cent of the offered quantity. 

The Cabinet Committee on Economic Affairs had, in the last week of February, allowed sale of non-linkage coal through a single e-auction window thereby merging earlier multiple auction windows into a solitary outlet. Following this, only the spot e-auction would serve all types of coal consumers now.

The consumers from regulated, non-regulated sectors and traders have to vie for coal under one common window. CIL conducted first ever e-auction under the revamped system in two of its subsidiaries on March 3, 2022.

The entire quantity of 3.2 lt offered by Northern Coalfields Ltd under the newly structured auction window was fully booked. Similarly, a little over 1.98 lt placed under the sole e-hammer by Eastern Coalfields Ltd got totally ordered, the company said in a press statement.

Preferential mode

CIL’s offer of e-auction coal is now mode agnostic, which means, the company will not specifically mention transportation mode of coal, ex-colliery. Earlier, the mode for coal booked under different auctions used to be specified. With rail as default mode the customers, however, have the option to choose their preferential mode – rail or road.

CIL had constituted a committee under a general manager of the marketing and sales division at corporate level to smoothen any crimps arising out of the migration to the modified system and rollout its seamless functioning. 

“The big upshot is discovery of true market price for coal with removal of the segmentation. Previously, same coal used to fetch different prices in different e-auction windows. Another point in favour of the new system is increased transparency with all the offered coal placed in a single basket. Hitherto coal companies had the discretion of separate offers for different windows,” a senior company official said in the statement.

Further, there will be a level playing field for all consumers with same price structure. Other benefits include elimination of cartelisation due to wider base of participants. As all e-auction coal will be placed in the same basket, the bidder will have more choice and as a result bookings are likely to increase.

Speaking to BusinessLine, Rupesh Sankhe, analyst at Elara Capital India had said, the revamped auction system would help CIL and other coal companies earn better premiums as they would get to know the exact demand at aggregate level, and their average realisation would go up.