The Hindu Business Line : Coal India eyes Nav Ratna status, IPO

Kolkata April 5 Encouraged by obtaining "Mini Ratna" status from the Department of Public Enterprises, Coal India Ltd (CIL) and four of its profit-making subsidiaries have initiated the process of meeting the eligibility and classification conditions for "Nav Ratna" status and also to make an IPO (initial public offer).

Although the newly accorded Mini Ratna status provides CIL and the four subsidiaries some financial and operation autonomy, it desires to enjoy more autonomy in order to ensure higher transparency in its operations. The CIL board has thus decided to deliberate on the IPO issue at its next meeting,

Indicating this to newspersons here on Thursday, the Chairman of CIL, Mr Partha S. Bhatacherjee, said a proposal recommending to dilute 5 per cent of its paid-up equity capital is to be put before the company's board for approval. Once it is approved by the board, the proposal will be sent to the concerned ministry in New Delhi.

Reviving MAMC

Mr Bhattacherjee said that as part of CIL's plan to meet its future requirement of OTR tyre and equipment and spare for its underground mines, it proposed to make a long term off-take arrangement with a few domestic tyre makers and also have plans to help revive the closed Mining and Allied Machinery Corporation at Durgapur in West Bengal. This is a Central PSU having past brand image as a manufacturer of underground mining equipment.

CIL has already entered into an agreement with JK Tyres and Apollo Tyres for the creation of OTR tyre making facilities at their existing units. CIL would give financial support to the tune about Rs 100 crore to each tyre maker. As per agreement, about 50 per cent of OTR tyre would be supplied to CIL.

He said a Chinese underground equipment manufacturing outfit has agreed to supply necessary production technology for revival of MAMC, while the State-owned utility company Damodar Valley Corporation (DVC) was keen to participate in the MAMC revival process as a partner. An MoU in this regard would shortly be signed between DVC and CIL.

Other focus areas

It was pointed out that CIL had plans to add value to its coal while the company's focus during the 11th Plan would be on the development of underground mines, coal beneficiation and generation of power for meeting a few of its subsidiaries' power requirement. The company was keen to set up a series of coal washeries jointly with private partners on Build and Operate route. The proposed washeries' capacity would be at least 100 million tonnes of coal per annum by 2011-12.