Companies

Draft mining Bill: Coal India net profit to get eroded by Rs 2,200 cr

PTI New Delhi | Updated on March 12, 2018

Coal India’s annual consolidated net will get eroded by around Rs 2,200 crore once the draft MMDR Bill that obligates coal miners to share 26 per cent of their profits with project-affected people is implemented.

“As part of our CSR policy, we spend Rs 5 per tonne, or 5 per cent of the net profit, whichever is higher, with the project affected people now,” a company spokesperson told PTI.

The state-owned miner, which accounts for 81 per cent of the country’s total production of coal, had reported Rs 10,867-crore consolidated net profit in 2010-11.

Since it already shares 5 per cent of its net profit with the project-affected people, the additional impact would be 21 per cent or a little over 2,200 crore, considering the bottomline of the company remains around the same level.

Meanwhile, the stock of the company plunged by 8.12 per cent to Rs 362 on the Bombay Stock Exchange on Friday.

“The additional burden could see further selling by investors in the next few days,” an analyst said.

A few Foreign Institutional Investors (FIIs) may also press the “Sell” button on the company stock in the coming days, he said, however, adding that the stock would continue to remain an attractive one in the medium to long-term.

As of June-end, FIIs held 6.37 per cent stake in Coal India, raising their stake by 0.28 per cent since the end of March.

The ministerial panel, headed by the Finance Minister Pranab Mukherjee, had approved the Mines and Mineral (Development and Regulation) Bill, 2011, according to which coal miners would have to share 26 per cent of their profit and non-coal miners 100 per cent royalty with the project-affected people.

The draft Bill will be sent for Cabinet approval soon.

Published on July 10, 2011

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

null
This article is closed for comments.
Please Email the Editor