Coal India, after getting the necessary approval from the coal ministry, has begun discussions with the disinvestment department of the finance ministry to divest up to 10 per cent of government stake in the company.
"We have had a very good discussion on setting a road map for disinvestment in Coal India," Coal India chairman P S Bhattacharyya told PTI.
Bhattacharya met Disinvestment Secretary Sunil Mitra on Wednesday to finalise the '5-10 per cent' equity dilution in Coal India.
The company has already received the coal ministry's nod to reduce the face value of its shares to Rs 10 from Rs 1,000 at present.
"The coal ministry has given us its approval to lower the face value of our shares from Rs 1,000 a share at present to Rs 10 per share," Bhattacharya said.
The navratna firm's equity base thus would be expanded to 631.6 crore (6.31 billion) shares from the current 6.316 crore (63.1 million) shares. The company has a paid up equity capital of about Rs 6,300 crore (Rs 63 billion).
Also, the coal ministry has approved the conversion of the PSU from a 'Private Limited' firm to a 'Public Limited' one.
It has approved increasing number of shareholders to seven from the current six, a condition for any state-run entity to become 'Public Limited'.
Coal India is registered as a 'Private Limited' company and will soon be a 'Public Limited' firm with an small amendment, Bhattacharya said. It is a pre-requisite for disinvestment and coming out with a public offer.
Coal Minister Sriprakash Jaiswal had last month said he would take up the dilution of government equity with Prime Minister Manmohan Singh after the monsoon session of Parliament. The session ended on August 7.
The company aims to give a boost to its R&R policy by way offering shares to the people whose land is acquired for mining purposes. Besides this, Coal India will offer shares to its employees. The remaining will be left for transaction on the bourses.
To do all this, the coal ministry would have to introduce a bill to amend the present Coal Mines Nationalisation Act, paving way for the proposed disinvestment.
CIL has an estimated coal reserves of up to 100 billion tonnes and over 80 per cent market share in the country.
Coal India produced about 403 million tonnes of coal last fiscal. The company has a capital expenditure plan of Rs 3,200 crore (Rs 32 billion) for this fiscal and aims to increase production by 7.5 per cent to 435 million tonnes by the end of the current financial year.
Coal India had a profit before tax of Rs 8,738.46 crore (Rs 87.38 billion) in the last fiscal.
Image: Work in progress at a CIL mine. | Photograph: coalindia.nic.in/
