Coal ministry seeks CIL nod for listing CMPDIL

By: |
October 07, 2021 2:00 AM

Though neither CIL officials nor CMPDIL officials wanted to comment on the issue, a source in the CIL said, the ministry is awaiting the CIL board's nod.

The ministry has requested CIL to take up the issue on its board for approval from its directors and "send the said approval to the ministry of coal for getting further clearances."The ministry has requested CIL to take up the issue on its board for approval from its directors and "send the said approval to the ministry of coal for getting further clearances."

The coal ministry has directed Coal India (CIL) to get its consultancy arm, Central Mine Planning and Design Institute (CMPDIL), to divest 10% of its paid-up capital and consequently get listed in the browses to tap the unlocked value of the subsidiaries.

The ministry has requested CIL to take up the issue on its board for approval from its directors and “send the said approval to the ministry of coal for getting further clearances.”

A coal ministry official told Fe, the matter has been decided after due deliberation and a letter has already been sent to CIL for taking necessary actions. According to the letter, available with FE, listing the subsidiaries would “improve their functioning”. It is CMPDIL, to begin with, the ministry official said.

CMPDIL is a 100% subsidiary of CIL and separately listing it would involve spinning out the company as an independent company. Following the CIL board’s nod, CMPDIL would be required to pass a special resolution convening a meeting of its shareholders and a valuation report has to be placed before them.

Spinning out CMPDIL from CIL would also reduce CIL’s share capital and changes will have to be brought in the memorandum of association, the ministry official said.

Though neither CIL officials nor CMPDIL officials wanted to comment on the issue, a source in the CIL said, the ministry is awaiting the CIL board’s nod.

Following Niti Aayog’s proposal to spin off CIL subsidiaries, the department of investment and public asset management (DIPAM) has been examining the proposal to list CIL’s profit-making subsidiaries on the stock exchanges since 2019. CMPDIL has been a profit-making subsidiary for more than the last five years and its net worth as of March FY21 has been at Rs 787.47 crore. It’s earning per share, compounded on 14,28,000 shares of CIL’s total 616,27,24,370 equity shares, has been at Rs 2,219.61 as of March last fiscal.

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