An affiliate of Adani Enterprises Ltd (AEL) will operate its coal washeries, the company has said, sending the shares of the group flagship two percent higher in the morning trade, making them the second-biggest gainer on the Nifty50 index.
Adani Enterprises was trading 1.7 percent higher at Rs 1,833.10 on the BSE. The stock is still far from its 52-week high of Rs 4,189.55. The multibagger stock has generated 1,193 percent returns in the past three years but was pounded after the release of a report by US short-seller Hindenburg Research in late January.
On January 24, the stock closed at Rs 3,442.75. The Hindenburg report came in after market hours and triggered a slide in Adani group stocks, as it accused the conglomerate of stock manipulation. The company denied the charges but it did little to stem the fall. Adani Enterprises slipped to its lowest at Rs 1,017.1 on February 3, a 70 percent decline from the closing price of January 24.
Adani Enterprises told exchanges on April 11, "The company has incorporated a WOS (Wholly-Owned Subsidiary) Pelma Collieries Ltd (PCL) on April 7, with an initial authorised share capital of Rs 10,00,000 and paid-up share capital of Rs 5,00,000," it said in a regulatory filing on April 11.
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According to the filing, the entity will develop, erect, and operate coal washeries, including coal handling systems, as well as perform all necessary and incidental activities.
The company will begin operations in due course.
What is coal washing?
Coal washing or coal preparation plant (CPP) is a process of refining or cleaning coal of impurities. The process of coal washing uses water, mechanical techniques, gravity, and the difference in density between coal and its impurities, which are inorganic and usually more densely packed than coal.
Due to the longer burn time, washed coal is more expensive than unwashed coal. According to a study by the US Department of Energy, the use of washed coal reduces carbon dioxide emissions by 11 percent.
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