MoC sets performance targets for 2011 fiscal: CIL-listing by January'11

The Ministry of Coal (MoC) has proposed to list the largest domestic coal producer, Coal India Limited (CIL), in the bourses by January 2011. Subsequent to this listing, the Union Government is expected to dilute 10 % of its stake in CIL, as part of its disinvestment programme, to raise between Rs 12,000-15,000 crore from the initial public offer. Significantly, listing of the Navaratna central public sector enterprise (CPSE) is also necessary for grant of the Maharatna status, which will enable the coal major to enjoy greater financial autonomy.
 This is the last hurdle faced by the coal major in its quest for the coveted status. It already meets the main qualifying criteria, including possessing average annual turn-over of more than Rs 25,000 crore, net worth of more than Rs 15,000 crore, net profit of more than Rs 5,000 crore and a global presence. CIL requires the standing to acquire overseas mining assets, part of its plans for the umpcoming years. To note, the grant of this status will enable the Board of Directors of CIL to make equity investments, to establish joint ventures and wholly-owned subsidiaries and to undertake mergers and acquisitions, in India or abroad, up to a ceiling of 15% of its net worth, or Rs 5,000 crore, in one project, as against the limit of only Rs 1,000 crore available to Navaratna CPSEs. The Department of Public Enterprises, under the Ministry of Heavy Industries & Public Enterprises, has, so far, granted the Maharatna status to four Navaratna CPSEs, namely NTPC, Steel Authority of India Limited (SAIL), Indian Oil Corporation Limited (IOC) and Oil and Natural Gas Corporation Limited (ONGC).  

Pertinently, in the recently concluded 2009-10 fiscal, the coal major posted a 399.88% surge in its profit after tax (PAT), which reached Rs 8,312.40 crore for the financial year 2009-10, against the profit of Rs 2,078.70 crore recorded a year ago. The net worth of the company has also gone up, from Rs 19,165.04 crore at the end of 2008-09, to Rs 24,541.01 crore. The company achieved 6.8% growth in coal production during the fiscal, by producing 431.267 million tonnes (MT) of coal. Pertinently, CIL contributed a total of Rs 7,020.51 crore, in the form of corporate tax, dividend and dividend tax, to the central exchequer during the just-ended fiscal, as against Rs 5,920.15 crore paid during 2008-09.