Prism Johnson Shares Jump Over 10% on 1.28 Lakh TPA Coal Linkage Win From Coal India Subsidiaries
Key Takeaways
- •Prism Johnson secured a new coal linkage of 1.28 lakh tonnes per annum from subsidiaries of Coal India Ltd.
- •The company’s total coal linkage has increased to 2.79 lakh TPA after the new award.
- •The combined linkage now covers about half of the Cement Division’s annual fuel requirement.
- •Existing linkage of 1.11 lakh TPA is scheduled to expire in February 2027.
- •Prism Johnson’s shares gained more than 10% on August 19 after the linkage win.
Prism Johnson Ltd's shares jumped more than 10% on August 19 after the company secured a coal linkage of 1.28 lakh tonnes per annum (TPA) — 128,000 tonnes — from subsidiaries of state-run Coal India Ltd through a successful bid.
Following the award, Prism Johnson's total coal linkage has increased to 2.79 lakh TPA (279,000 tonnes), covering approximately half of its Cement Division's annual fuel requirement. The new linkage comes in addition to the company's existing coal linkage of 1.51 lakh TPA, of which 1.11 lakh TPA is scheduled to expire in February 2027. The award is relevant to the company's cost structure because fuel and power are among the largest cost components in cement manufacturing, and long-term linkage contracts assure supply at contracted prices, reducing exposure to spot e-auction rates and imported coal prices, which swung sharply during the global energy crisis of 2022.
Prism Johnson, formerly known as Prism Cement and part of the Rajan Raheja group, is an Indian building materials company with businesses spanning cement, ready-mixed concrete, and tiles and bath fittings through its H&R Johnson division. The company's cement plant is located at Satna in Madhya Pradesh, and its shares are listed on the BSE and the National Stock Exchange.
Coal India, the world's largest coal producer, supplies fuel to industrial consumers through long-term linkage contracts, which are awarded by its subsidiaries through competitive bidding. For non-power sectors such as cement and steel, these auctions are conducted under the framework of the coal ministry's SHAKTI policy, notified in 2017, which provides for transparent auction-based allocation of linkages to non-regulated consumers. With roughly half of the Cement Division's fuel requirement still outside linkage contracts, and 1.11 lakh TPA of existing linkage expiring in February 2027, future auction rounds are among the channels through which the company's fuel coverage can be replenished or extended.
Related coverage: Prism Johnson Q1 results
Source: CNBC-TV18
