Coal India aims for Rs 3,000 cr from IPO

Coal India Limited (CIL) has approached the government for getting approval to float a maiden public offer of five per cent paid up capital to raise Rs 3,000 crore from the market, its Chairman Sashi Kumar said today.

Speaking on the sidelines of coal conference organised by Metaljunction here, Kumar said CIL had written to the government for stake dilution.

He said since CIL enjoyed high credit rating, this was the right time for the company to hit the capital market.

The company would be able to realise 10 times its book value if the public offer was made now, the CIL chief said.

With a total paid up equity base of Rs 6,316 crore, five per cent of it would be Rs 315 crore.

CIL chairman said the company was expecting to earn profit before tax of Rs 8,000 crore during the current financial year, while revenues would be in the region of Rs 32,000 crore.

Production by CIL during 2005-06 would be around 345 million tonne.

Regarding Coal Videsh, he said that it would function as a separate division at the moment. Kumar added that CIL was yet to take a decision on forming a subsidiary for Coal Videsh.

On e-auction of coal, he said CIL's earning potential from this route would be around Rs 1,000 crore per annum.