The government is likely to divest between 5 and 10 percent in Coal India
by August, reports the Economic Times today. The move could bring down the government’s stake in the company to roughly 69 percent from 79.78 percent and add Rs 20,000 crore to its divestment earnings.
If 10 percent is divested, Coal India will also benefit in terms of conforming to holding norms in which a public listed company needs to have at least 25 percent shares listed on stock exchanges
The government’s holding had increased marginally to 79.78 percent from 79.68 after the company bought back 1.7 per cent (10.89 crore shares) of its fully paid-up shares for Rs 3,650 crore last year.
Poor demand has led to a fall in production as well as sales for the company with growth at sub-2 percent this year so far from 10 percent in 2015-16. In the third quarter, it posted a loss of Rs 39 crore on a standalone basis as compared to a profit of Rs 672.6 crore in the year-ago period. Total income declined to Rs 257.1 crore in the quarter from Rs 880 crore. On a consolidated basis, Q3 net profit dipped 22 percent to Rs 2,884.4 crore.
The company had recently announced plan to explore coking coal assets overseas as the country is faced with constraints of techno-commercially viable domestic metallurgical coal reserves.
“The recent spurt in global coal prices, particularly for coking coal, is expected to create an encouraging scenario for such acquisition process,” Coal and Power Minister Piyush Goyal said in a written reply to Rajya Sabha.