Coal India Ltd (CIL), which has a tentative target of hitting the capital markets by the second quarter of 2010-11, is waiting for the right signals from the Union coal ministry on the issues of hike in prices and disinvestment.
The ministry’s decision on Friday to rule out a hike in coal prices has been a dampener for the Navratna public sector firm, which has internally worked out a target to come up with an initial public offer (IPO) by September 2010.
“CIL is aiming for an IPO by September 2010 but before the IPO, we are in dire need of a price hike to shore up our bottomline. The last price hike by CIL was in September 2007 and implementation of the National Coal Wage Agreement (NCWA)-VIIII has seriously impacted our bottomline for 2009-10,” said a CIL source.
CIL’s net profit in 2008-09 stood at only Rs 96 crore after it paid arrears worth Rs 7,856 crore to its employees as a result of the hike in salaries under NCWA-VIII, which was to be implemented with retrospective effect from July 2006.
The wage hike had also rendered as many as 33 projects of CIL in the 11th Plan Period (2007-2012) as commercially unviable.