KOLKATA | Feb 13, 2017: The government plans to divest up to 10 per cent in Coal India by August, a move that will help it earn about Rs 20,000 crore at today’s prices and reduce its stake to 69 per cent.
The government is likely to divest between 5 per cent and 10 per cent. It already has permission for divesting 10 per cent in the company. At present, the government holds 79.78 per cent in the company, a senior Coal India executive said on condition of anonymity.
Last year, Coal India offered to buy-back 1.7 per cent (10.89 crore shares) of its fully paid-up equity shares at Rs 335 per share totalling Rs 3,650 crore. After the buy-back, the government’s holding in Coal India increased marginally to 79.78 per cent from 79.68 per cent.
If the government divests 10 per cent of its shares, it is likely to help the Centre raise around Rs 20,000 crore and will allow Coal India to conform to holding norms in which a public listed company needs to have at least 25 per cent shares listed on stock exchanges, the executive said.
The company has been witnessing a fall in production as well as sales due to less than anticipated power demand growth. Against a near 10 per cent growth in 2015-16, this year the company has not been able to attain a growth of even 2 per cent either in sales or production.
Nevertheless, Coal India share price has been falling from September last year till January, after which it started to rise on anticipation of marginal better performance as coal production picks up after the monsoons every year, said an analyst.
(Source: http://economictimes.indiatimes.com/)