India’s coal pool pricing: the importance of getting it right
This week, India’s Cabinet Committee on Economic Affairs gave its approval “in principle” for coal price pooling. State governments have spoken out, stocks have rallied and companies have had their say.
So, what’s all the fuss about? Continue reading »
Guest post: coal scandal tests India’s democracy
By Akshay Mathur of Gateway House
It’s not easy to defend India’s democratic structure and economic policy-making these days. The latest gridlock in parliament over the national auditor’s estimation of a potential loss of $33bn in revenue associated with coal blocks allocation is only the latest indictment of the country’s leadership. Continue reading »
India Inc’s dormant $167bn
It may seem no bad thing that India Inc is sitting on a mountain of cash – over $167bn at the end of March for the top listed 500 companies, according to the Economic Times. With the economy slowing and earnings weak – from State Bank of India to Bharti Airtel – the money might come in useful.
But in reality, the 26 per cent increase in net cash over the past three years is worrying evidence of the concerns India’s corporate leaders have over the economy. With industrial production flat, growth slackening, and inflation running high, these companies are unlikely to spend their reserves anytime soon. Continue reading »
Indian electricity reform: will the blackouts force action?
As electricity supplies go back online, advocates of energy reform in India are hoping that this week’s power outages will provide an opening to press for far-reaching changes. However, the desire for reform will as ever come up against the politically possible. Continue reading »
India’s petrol hike: economics vs poor
Well, that was quick.
A mere 24 hours after the state-run Indian Oil Corp introduced what has been widely-acknowledged as a much-needed and long overdue 11 per cent price hike on the price of petrol on Wednesday, Delhi’s already talking about a partial rollback. Continue reading »
TCI/Coal India: is it worth it?
Indian power companies rejoiced on Wednesday after the government issued a rare decree forcing state-controlled Coal India to increase supplies of cheap fuel to ease chronic energy shortages.
And investors lapped it up: despite a generally weak market, shares in Adani Power, Tata Power, and JSW Energy all rose by more than 2 per cent in early trading. Tata and and JSW later fell back, but Adani finished 2.8 per cent up.
But there was at least one player who was not so excited: The Children’s Investment Fund, the hedge fund that recently launched a campaign against political interference in Coal India. If this were a cartoon, this would be the point at which steam pours out of TCI’s ears. Continue reading »
Coal India’s low prices: some method to the madness?
The Children’s Investment Fund wants to raise electricity bills for the 67 per cent of Indians with access to electricity.
Not that TCI doesn’t have a good reason. Coal India, the 90 per cent state-owned giant, sells coal at prices 40 to 70 per cent lower than international ones, and TCI is the company’s biggest minority shareholder. Continue reading »
Guest post: investor activism in India
By Shriram Subramanian of InGovern
The letter sent by The Children’s Investment Fund (TCI) to Coal India is a wakeup call for the Indian government, companies and institutional investors to take corporate governance issues seriously. Probably for the first time in Indian corporate history, an institutional investor has threatened to sue individual board members of a listed entity. Continue reading »
Indian coal: imports steam in
By Varun Bhandari
India’s energy sector is attracting the eyes of one of the world’s largest energy consultancies.
Wood Mackenzie, the UK-based company, will open up shop in India by May this year, in a move that reflects the growing importance of India in the global coal market, it announced at a coal conference in Delhi this week. Continue reading »
TCI takes on Coal India
A wake-up call for complacent corporate India from The Children’s Investment Fund, the UK-based activist hedge fund. It sent a letter on Monday to Coal India – in which TCI’s 2 per cent stake makes it the biggest shareholder after the Indian government, with 90 per cent – accusing it of committing a “breach of fiduciary duties” to minority shareholders by reversing an earlier steep increase in the price it charges for coal. Continue reading »
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