The Hindu Business Line : Coal India to consider IPO only after getting Navratna status

The first meeting for considering awarding the coveted status to the central public sector undertaking, is scheduled to take place in the third week of this month.

Talking to newspersons on the sidelines of the 2nd Asian Mining Congress organised by the Mining Geological and Metallurgical Institute of India here, the CIL Chairman, Mr Partha S. Bhattacharya, said: “We may consider IPO only after the company is upgraded to a Navratna.”

The Miniratna has posted a net profit of Rs 8,212 crore on a sales turnover of close to Rs 37,000 crore in 2006-07.

Once upgraded to a Navratna, CIL would have greater autonomy with regard to investment decisions in India and abroad.

While Mr Bhattacharya declined to discuss the IPO further, CIL sources said that the company was hopeful to hit the capital market as early as in 2008-09. “We are waiting for the Navratna status as it would increase our valuation,” a source said.

While the mode of public offer can only be decided once the formal discussion starts, sources say CIL is not keen to issue fresh equity shares as it would expand its capital base further.

“CIL’s total borrowing now stands at a mere nine per cent of its equity capital. Also, we have no immediate plan to raise debt and our estimated capital expenditure of Rs 18,000 crore to increase production to 520 million tonnes will mostly be funded by internal accruals. Accordingly, there is no immediate need for enhancing our equity base,” the source said.

The Union Coal Secretary, Mr H.C. Gupta, told newspersons that India’s captive coal production would increase fourfold during the XI-Plan period.