The blue chip company, which offloaded 26 per cent of the Gujarat government's holding to the public in October 1997 at Rs 130 per share (including a premium of Rs 120), posted a net profit of Rs 85.70 crore in 1997-98, 21 per cent higher than the Rs 71.16 crore reported in the previous year.

The company's share price had come down to Rs 168 in April on account of a recession in the capital market. The nuclear blasts at Pokharan saw the scrip take a further beating, nearing its issue price of Rs 130. Lately, however, the scrip has recovered and is quoting at Rs 170 to 180.

The company's annualised earnings per share (EPS) at the end of March was about Rs 27 as against Rs 22 in the previous year before partial privatisation. The state government is committed to divest another 23 per cent to25 per cent of its holding to the public, but this is unlikely to take place before the market condition improves.

According to the audited results presented before the board here, the company made a profit before tax (PBT) of Rs 179.21 crore on a turnover of Rs 270.96 crore, compared with a PBT of Rs 159.15 crore on a turnover of Rs 248.36 crore in the previous year.

Briefing newspersons, GMDC chairman-cum-managing director VV Rama Subba Rao said the company would be facing for the first time 23,000-odd shareholders, owning 26 per cent of its equity base of Rs 318 crore, at its annual general meeting next month. Mainly engaged in mining lignite and other minerals since 1963, the company's sales during 1997-98 stood at Rs 239 crore, compared with Rs 215 crore in 1996-97. Its interest component during the period under review fell sharply to Rs 63 lakh from Rs 6.72 crore in the previous year.

Rao attributed the steep hike in net profit to better fiscal management, which resulted in improved cashflow.

Referring to the cash-rich company's future projects, he said that the power purchase agreement (PPA) for its Rs 1,200-crore 250mw power plant at Nani Cher, adjacent to lignite mines in Kutch district, was expected to be signed with the Gujarat Electricity Board (GEB) around September. Nearly Rs 300 crore was proposed to be raised through internal accrual, and the remaining through the debt market. The financial closure is expected by December-end, so that the plant can be commissioned by January 2002.

GMDC has also tied up Birla Copper and Tata Chemicals in collaboration with the Gujarat Maritime Board (GMB) to supply lignite through sea routes from Jakhau or Mandvi to Dahej and Okha. At present, lignite mined at Panandhro in Kutch district is transported by road to different centres in Gujarat. The company has already acquired land for mining lignite from fresh deposits found in Bhavnagar and Surat-Broach districts. It is awaiting the clearance of the union ministry of environment and forest(MoEF). However, the company has almost decided to wind up its multi-metal project on the Rajasthan border, which has been uneconomical from the very beginning, as well as its fluorospar project.