JPMorgan upgraded Coal India to 'neutral' from 'underweight', saying the drop in the share price this year is making the risk reward "relatively more attractive".
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The investment bank expects Coal India to pay out a dividend at 45 per cent and sees a likely increase in power coal sale prices.
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The government's planned stake sale would be an opportunity to add the stock, JPMorgan added.
Coal India shares gained 0.7 per cent, after falling 16.4 per cent this year, underperforming a 3.6 per cent fall in the Nifty this year.
Copyright @ Thomson Reuters 2013