The government has announced plans to sell a 10-per cent stake in Coal India (CIL), sending the company’s shares down 17 per cent in six days. The government had last sold 10 per cent stake in the bluechip coal major on January 31, 2015.
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The announcement on Coal India came amid growing investor concerns about the fate of Prime Minister Narendra Modi’s reform agenda due to a political logjam in parliament.
Accordingly, the Department of Disinvestment (DoD) has invited applications from merchant bankers to manage the stake sale that would be carried out through the offer-for-sale (OFS) mechanism and is expected to raise over Rs 24,000 crore.
The government now holds 79.65 per cent stake in Coal India (CIL). The disinvestment department is readying PSUs for stake sale and is seeking Cabinet approval for the same. Total income from operations (net) in the recently concluded quarter grew to Rs 19,518.08 crore, a growth of 6.6 per cent over Rs 18,305.61 crore a year ago. It has Cabinet nod for about two dozen PSUs and is waiting for right market conditions to go ahead with the stake sale.
The Maharatna CPSE had posted a consolidated net profit of Rs 4,033.22 crore in the April-June quarter of the previous fiscal.
Profit before tax in the quarter was down 2.26% y-o-y to Rs 5,807.20 crore from Rs 5,942.03 crore in the same period last fiscal.
This stake sale would help the government move closer to its divestment target of Rs 70,000 crore.
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“The results show Coal India has been able to ramp up volumes and has been able to maintain margins thanks to higher e-auction volumes”, he said.
