Shares of Coal India Limited surged as much as 2% to hit a high of ₹443.05 in early trade on Thursday, a day after the company formed a joint venture with Bharat Heavy Electricals Limited (BHEL) for setting up an ammonium nitrate plant through surface coal gasification (SCG) technology route. On the other hand, BHEL shares dropped over 1% in the trade first two hours of trade so far.

Coal India shares opened higher at ₹434.80, up 0.25%, as against the previous closing price of ₹433.70. At 11:02 am, the share price of the company was trading flat at ₹430.80.

The company hit a 52-week high of ₹487.75 on February 16 this year, whereas a 52-week low of ₹207.70 on March 27 last year. The company's market capitalisation stood at ₹2,66,538 lakh crore, with more than 1.78 lakh shares exchanging hands on the BSE, as against the two-week average of 8.37 lakh shares.

Meanwhile, the share price of Bharat Heavy Electricals Limited was trading 1.02% lower at ₹222.35. The scrip opened higher at ₹226.20, as against the previous closing price of ₹224.65. The share price of the company, however, fell later by 2.1% in line with the broader BSE Sensex. The company’s market capitalisation stood at ₹77,737 crore with more than 4.34 lakh shares exchanging hands on the BSE, as against the two-week average of 27.26 lakh shares.

According to the joint statement, Coal India will hold a 51% stake in the joint venture, while BHEL will own 49% shares in the entity. Both PSUs will have the right to nominate three directors each on the board of the joint venture company.

According to a notification by the ministry of coal, the plant, which will be constructed in Odisha, is planned to produce 2,000 tons of ammonium nitrate per day initially. The annual production is slated to be at 6.60 lakh tons, which requires 1.3 million tonnes of coal. While Coal India Limited will supply coal, BHEL would bring to the table indigenously developed pressurised fluidised bed gasification technology (PFBG). As per the ministry, the upcoming plant would help in securing the raw material and reducing import dependency of ammonium nitrate.

"The synergy and partnership of the two corporate giants is a big step towards National Coal Gasification Mission which facilitates utilization of chemical properties of coal,” says the ministry.

"Gasification is the highest priority area for the ministry of coal. In next two to three years there will be sufficient coal”, he said. All the possible support from government is in place including financial support for viable gap funding,” says Amrit Lal Meena, Coal Secretary. 

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