Sets aside $1.2 billion for foreign acquisitions.
Coal India, the largest coal producing company in the world, expects an increase of 25 per cent in net profit for the financial year ending March 31, 2011 (FY11) compared with the year-ago period, a top official said on Wednesday.
“This year, we will see 25 per cent increase in profit,” Chairman Partha Bhattacharyya said at a press conference to promote the company’s initial public offer (IPO) in Mumbai.
However, market participants were surprised that the company’s chairman gave such a guidance in a press conference. These types of forward-looking statements are not allowed before any IPOs, according to
Securities and Exchange Board of India (Sebi) rules.
There have been demands to do away with this restriction and allow companies to give guidance before an IPO, which will help retail investors to make up their minds. “Companies should be allowed to make forward-looking statements. Equity investment is all about the future,” Delhi-based Prime Database Chairman Prithvi Haldea said.
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According to the red herring prospectus of the company, on a consolidated basis, it had registered a net profit of Rs 9,833.69 crore in the last financial year (FY10), on a total income of Rs 52,592.29 crore. For the three months ended June 30, Coal India’s total income was about Rs 13,110 crore, while profit for the period stood at Rs 2,521.78 crore. Also, as of June 30, Coal India had a cash and bank balance of Rs 38,046.34 crore and debt of Rs 1,779.45 crore.
Coal India has set aside $1.2 billion (Rs 5,300 crore) in this financial year for foreign acquisitions, Bhattacharyya said. “A couple of proposals are under due diligence,” he added. Coal India is looking for acquisitions in countries like Australia, Indonesia, USA and South Africa.
Bhattacharyya said 115 projects of the company were at various stages of environmental clearance. “If the delays in environmental clearance are reduced, coal production can be ramped up faster,” he said.