Coal India Ltd’s capex soars 33% to Rs 7,027 cr in H1 FY23

Kolkata: Coal India Ltd's (CIL) capex soared by 33 percent in the first half of the current fiscal year, compared to H1 FY22. The growth came on the tailwinds of expenditure pumped into the expansion of coal evacuation infrastructure, said Coal India in a statement on Wednesday. The capex of Rs 7,027 crore during April-September period surpassed Rs 5,300 crore spent in the corresponding period last year by Rs 1,727 crore, posting 33 percent growth.

Two segments of coal evacuation infrastructure — setting up of coal handling plants (CHP)/silos and railways lines — combined, accounted for 36 percent or Rs 2,547 crore of Coal India's total capex in the period ending September FY23.

"Capex push is essential for long-term growth prospects. To align the increasing production with robust transportation logistics, CIL is fast-tracking the development of its coal evacuation system. This would help in handling the seamless movement of coal in the future," said a senior executive of Coal India.

Capex: Coal evacuation projects accounts for bulk of expenses

During the referred period, capital expenditure on coal evacuation projects pipped the heads of land acquisition and procurement of heavy earth moving machinery (HEMM) which conventionally comprise the bulk of the capex.

Govt considers Renewable Generation Obligation for TPPs set up after April 1, 2024

Construction of CHPs/silos under first mile connectivity was the major capex head that entailed an expenditure of Rs 1,489 crore in H1 FY23, marking an increase of 2.4 times compared to Rs 614 crore spent in the corresponding period a year ago. "This underscores CIL's intent to put in place a strong coal transportation infrastructure to move greater quantities of coal in future. Most of the expenditure was incurred by CIL's three subsidiaries MCL, NCL and SECL," said the statement.

Expenditure on rail corridors, sidings at Rs 1,058 cr

Laying rails corridors and rail sidings was the next major head where the capital expenditure has risen to Rs 1,058 crore with an upsurge of 33 percent. Capex under this head during H1 of the last financial year was Rs 793 crore. SECL accounted for more than 56 percent at Rs 589 crore.

Coal India likely to close FY23 with capex of Rs 16,500 cr

The capex which was Rs 6,270 crore in FY20 has improved significantly in the recent years. The current fiscal's H1 capex was 12 percent more than that of the entire year's capex of FY20. CIL is likely to close FY23 with Rs 16,500 crore, which would represent a 2.6X capex jump in a span of three years, the statement said.

Expenditure on land and HEMM followed with Rs 1,056 crore and Rs 618 crore, respectively.

"It is essential that concurrent with production, capex is also hiked up to sustain the growth momentum. We have increased our capex on introduction of modernised fleet and laying new rail lines which are catalysts for output and off-take growth," said the executive.

(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Google News. Click here to follow. Also, join PSU Watch Channel in your Telegram. You may also follow us on Twitter here and stay updated.)