Coal India to discuss buy back in the next meet

The largest coal producer company in the world, Coal India Ltd., which contributes around 82 per cent of the coal production in India is planning to pass the proposal of buyback of shares in the next board meeting.

However, the date of the next board meeting as well as the quantum of the buyback plan are yet to be finalised. The buyback size could be at least 5 per cent of the paid-up capital. (sources PTI).

Finance Ministry is pushing for buyback of shares by Central Public Centre Enterprize. This is being done for two purposes: to generate cash for the government and help push up the valuation for any divestment. In the last one year, Coal India has seen depletion in its cash reserve of Rs 8,700 crore to Rs 38,300 crore as on March 2016, which accounts for approximate 18 per cent.

Company has posted a positive result in this quarter. Company’s net profit stands at Rs 4247.93 crores in Q4FY16 as compared to Rs 3718.25 crore in the last quarter, with an increase of 14.25 per cent.

The government has set a disinvestment target of Rs 56,500 crore for 2016-17. Of this, Rs 36,000 crore is expected to come from minority stake sales. The Centre will bring down its stake in Coal India below 75 per cent to adhere to market regulator SEBI norms. The deadline for completing such a divestment is August 2017.

Coal India Limited (CIL) is an Indian state-controlled coal mining company headquartered in Kolkata, West Bengal, India. Union Government of India owns 79.65% of the shares in Coal India Ltd., and controls the operations of the company through Ministry of Coal.

The shares on the bourses on Monday have opened marginally down and are trading at Rs 305.10, marginally down by 1.25 per cent.