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Monday, January 30, 2006

CIL plans Rs 3,000cr IPO

Having converted all its subsidiaries into profit-making entities, public sector Coal India, CIL, is now planning to hit the capital market with its maiden public offer of 5% paid-up capital to raise an ambitious Rs 3,000 crore (Rs 30 billion), reports The Financial Express.

The entire proceeds from the proposed initial public offer, IPO, would be used to fund the company’s expansion programme where CIL is targeting to increase production to 571 million tonne by the end of 11th Plan period (2011-12).

According to highly-placed sources, the coal PSU has already apprised the coal ministry of its intentions and once the green signal comes, it would seek board proposal for issuing 5% of its equity capital of Rs 6,316 crore (Rs 63.16 billion) - about Rs 315 crore (Rs 3.15 billion) in the market.

CIL has also applied to the department of public enterprises to get a mini-ratna status that would add value to the company and help it get better premium on shares.

Credit rating agency Crisil has already upgraded CIL’s rating for long-term debt programme from AA to the highest rating of AAA. This, and the overall buoyant coal market, will enable the PSU secure a hefty premium and realise in excess of Rs 3,000 crore (Rs 30 billion) through the IPO.

With CIL’s two subsidiaries, Bharat Coking Coal and Eastern Coalfields turning around in the third quarter, all CIL subsidiaries are in profit mode. CIL expects to double its profits to about Rs 4,900 crore (Rs 49 billion) on a turnover of Rs 32,000 crore (Rs 320 billion) this fiscal.

Source: Moneycontrol


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