New Delhi: In a step towards disinvestment, Coal India has got approval from the coal ministry to reduce the face value of its shares to Rs10 from existing Rs1,000, a move that would increase the number of the company’s shares to 631.6 crore.
At present, the face value of one Coal India share stands at Rs1,000 and the company has 6.316 crore shares, Coal India chairman P.S. Bhattacharyya.
“The coal ministry has given us its approval to lower the face value of our shares from Rs1,000 a share at present to Rs10 per share,” he said. The navaratna firm has a paid-up equity capital of about Rs6,300 crore.
Besides giving its nod to lower the face value of CIL’s shares, the coal ministry has approved the conversion of the PSU from a “private limited” firm into a “public limited” one, he said.
It has approved increasing the number of shareholders to seven from the current six, a condition for any state-run entity to become “public limited”.
“Coal India is registered as a private limited company and will soon be a public limited firm with a small amendment,” he said. It is a pre-requisite for disinvestment and coming out with a public offer.
Bhattacharyya is working to finalise the disinvestment proposal and had met the disinvestment secretary last week in this regard.
Coal minister Sriprakash Jaiswal had last month said he would take up the matter of divesting 5-10% of the government’s stake in the company with Prime Minister Manmohan Singh after the monsoon session of Parliament, which ended on 7 August.
The company aims at implementing its relief and rehabilitation policy by offering shares to people whose land is acquired for mining. Besides this, Coal India will offer shares to its employees. The remaining stocks will be left for trading on the bourses.
But, for selling stake, the coal ministry will have to introduce a Bill to amend the present Coal Mines Nationalisation Act, paving the way for the proposed disinvestment.
CIL has estimated coal reserves of up to 100 billion tonnes and an over 80% market share in the country. It produced about 403 million tonnes of coal last fiscal.
The company has a capital expenditure plan of Rs3,200 crore for this fiscal and aims to increase production by 7.5% to 435 million tonnes by the end of the current financial year.
Coal India had a profit before tax of Rs8,738.46 crore in the last fiscal.