Coal India IPO : IPO launch to be depend on market conditions

by khalid on 05/06/2010 · 0 comments

Coal India Limited is the largest coal producing company in the world. The company is a public sector undertaking of the Indian Government. It is involved in coal mining and production industry.The company is a Navratna company of Indian Government.

The Government said earlier that CIL is set to come up with an Initial Public Offer (IPO) by August but now Coal Minister Sriprakash Jaiswal saying that IPO could be delayed beyond August, depending on the bullish market situation. Coal India will file its DRHP (Draft Red Herring Prospectus) by the month end. We will definitely bring the CIL IPO, Minister said.

The government can raise over Rs 12,000 crore through IPO. The government holds 100 per cent in CIL ans it is looking at divesting 10 per cent of its equity through the issue. Coal India Limited (CIL) intends to offer 1% of its equity to its 400000 odd work force spread over its seven subsidiaries and in CIL itself through the Employees Stock Option Scheme.

The government has been initiating measures to bridge the coal demand-supply gap, which the minister pegged at 60 million tones for the FY11, by importing the fuel as well as mining it in joint ventures with foreign companies overseas and then shipping the produce to India. , Further, Jaiswal on the sidelines of the demand-supply gap has commented, “There are two options — one is importing coal to bridge the gap. The other is acquiring coal properties abroad in joint ventures for meeting our demand,” he said. “We are evaluating which of the two options would be more beneficial for Coal India. We will decide accordingly,” added by him.

Moving ahead, CIL is all set to acquire stakes in at least five coal mines in the USA, Australia and Indonesia within the next two months with an estimated investment of nearly Rs 8,000 crore. All these mines together have estimated reserves of 280 million tones and CIL estimates to import nearly 28 million tones every year for the country’s domestic needs.

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