All is not lost for Coal India employees

Coal India employees, who were barred by their unions from buying shares during the mega-IPO last year, may after all get another opportunity.

The Coal Ministry now says it can still reconsider the offer to allot up to 2 per cent shares to the workers on a preferential basis.

The trade unions had boycotted the divestment of the Government's stake in Coal India Ltd and had asked employees to abstain from participating in the issue.

The Government had reserved 10 per cent of the total shares on sale for CIL employees and had offered a discount of 5 per cent to workers on the issue price of Rs 245 per share.

“If workers are ready, we can make allotment of up to 2 per cent shares to them on a preferential basis at the same price,” the Coal Minister, Mr Sriprakash Jaiswal, told PTI in an interview.

He regretted that CIL's employees could not benefit from the company's mega-IPO due to trade unions' opposition to disinvestment.

The majority of the 3.98 lakh workforce did not bid for shares of the world's largest coal producer when the Government offloaded a 10 per cent stake in CIL in October 2010, garnering a whopping Rs 15,200 crore.

Union leaders had called a strike on the first day of the share offer in October 2010, and asked workers to abstain from bidding.

Of the 63.16 crore shares on offer, 10 per cent of which were reserved for its employees, only 10 per cent of the reserved shares were bid for by employees as the trade unions were protesting the share sale and had advised workers to stay away from the public offer.

Good listing

The small investors got good listing gains as they were allotted shares at Rs 232.75 a share after a discount of 5 per cent to the final issue price of Rs 245. However, the majority of the employees failed to cash in on the opportunity due to opposition from unions.

“Had the employees bought shares then, they could have been reaping rich dividends now,” Mr Jaiswal said, regretting the opposition by the unions. “But if they agree, we can still consider it,” he added.

A handful of employees who have the shares today have seen the price appreciate by about Rs 70 apiece from what they bought them for, as CIL's shares are hovering at around Rs 300 per share at present.

CIL's IPO was a grand success and Mr Jaiswal earlier had termed Coal India as “Gold India.”

The IPO got an overwhelming response from all investors and was oversubscribed 15.17 times, translating into total demand of Rs 2.3 lakh crore for the 63.16 crore shares on offer.

However, only about 27,000 applications were received against the 6.84 million shares reserved for employees and, among them, about 3,000 were rejected due to errors in the forms.

With a market capitalisation of Rs 1.90 lakh crore, the state-run coal behemoth is at present the country's fourth most valuable firm, behind Reliance Industries Ltd (which tops the list of 10 most valuable firms), ONGC (at second spot) and TCS.

It accounts for more than 80 per cent of domestic production and its output was recorded at about 431.5 million tonnes last fiscal. This fiscal, it has a target to produce about 460 mt of coal.

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