Coal India is likely to come out with the initial public offer for its two subsidiaries Bharat Coking Coal Limited (BBCL) and the Central Mine Planning and Design Institute (CMPDI) in the financial year 2024-25, according to sources.
Back in 2022, the company had said that its board had given an ‘in-principle’ approval to the divestment of 25% of paid-up share capital of BCCL and its subsequent listing on the stock exchanges. However, the subsidiary has so far not been listed.
“It (the listing of BCCL, CMPDI) is under process. It may happen by the next financial year,” said a government official aware of the development. “BCCL now is in profit and has paid all its debt,” the source noted.
Coal India share price climbed 2.9% and closed at Rs 445.4 on Thursday, far higher than the issue price of under its initial public offer that hit the market in October 2010.
During 2022-23, BCCL reported an annual profit after tax of Rs 645.01 crore against Rs 111.62 crore in 2021-22. CMPDI too reported net profit of Rs 296.66 crore in FY23 compared with Rs 282.12 crore in FY22.
The net worth of BCCL stood at Rs 3,771.24 crore as on March 31, 2023, the company said in its annual report for FY23. CMPDI’s net worth as on March 31, 2023 stood at Rs 1,217.65 crore.
BCCL produces the bulk of coking coal mined in the country meeting 50% of the total requirement of this key input for the steel industry. CMPDI, headquartered in Ranchi, is Coal India’s consultancy firm that provides research and support for mineral exploration, mining and infrastructure engineering, among others.
The government has, however, abandoned its earlier plans of merging the seven subsidiaries into its parent company, Coal India, and is planning to free BCCL and Eastern Coalfields (ECL) from the obligations of fuel supply agreement (FSA).
“Earlier we thought of merging CIL subsidiaries but there’s no need now,” the official said. “BCCL is going to do even better after 2-3 years. The coal they are producing is highly valuable and we (the government) are going to free them from FSA, so they can sell the produce in the open market. We are going to give the same freedom to ECL as well.”
CIL IPO was the largest PSU IPO raising Rs 15,199 crore till May 2022 when LIC overtook it with a mobilisation of Rs 21,008 crore via its IPO.
In January 2015, the government had sold another 10% stake in CIL to raise the highest ever amount of Rs 22,557 crore from any single PSU minority stake sale. Thereafter, the government continued a few tranches of minority stake sales via offer for sales and the exchange traded fund (ETF). The government now holds 63.13% in the coal miner.
Meanwhile, the government said Wednesday said CIL is likely to exceed its capex target of Rs 16,500 crore for the current financial year. On Monday, CIL chairman PM Prasad said the company was planning to lower its production of the dry fuel to 838 million tonne in 2024-25 against an earlier target of 850 million tonne, given that accumulated stocks grew o more than 38 million tonne, an all-time high for this time of the year.