CIL's Rs 12k-crore IPO to depend on market conditions
Indicating that the initial public offering for Coal India Limited could be postponed beyond August, the government today said that it will wait for good market conditions to launch it.business Updated: Jun 02, 2010 17:27 IST
Indicating that the initial public offering for Coal India Limited could be postponed beyond August, the government today said that it will wait for good market conditions to launch it.
"We had planned to bring the Coal India Ltd (CIL) IPO by July or August. But it could come in September also. We will bring the issue when conditions are good," Coal Minister Sriprakash Jaiswal told reporters here.
"Coal India will file its DRHP (Draft Red Herring Prospectus) by the month-end. We will definitely bring the CIL IPO," Jaiswal added.
Jaiswal had earlier said that the government could mop up over Rs 12,000 crore through the CIL issue.
The government is looking at divesting 10 per cent of its equity through the IPO. At present, the Centre owns 100 per cent equity in CIL.
The Union Cabinet is yet to clear the proposal. Some Left-wing trade unions have also been opposing the proposed sell-off.
On using imported coal prices as the benchmark for domestic coal, the minister said, "We have no such plans (as of now)."
However, Jaiswal had said last week that "in the recent price revision exercise, efforts have been made to price higher grades of non-coking coal of Eastern Coalfield Ltd closer to import parity price...it needs to be carried further."
The Planning Commission has also supported linking domestic coal prices to that of imported coal.
The government has been taking steps to bridge the coal demand-supply gap, which the minister pegged at 60 million tonnes for the current fiscal, by importing the fuel as well as mining it in joint ventures with foreign companies overseas and then shipping the produce to India.
"There are two options -- one is importing coal to bridge the gap. The other is acquiring coal properties abroad in joint ventures for meeting our demand," he said.
"We are evaluating which of the two options would be more beneficial for Coal India. We will decide accordingly," he said.
CIL is in talks with US-based Massey Energy, Peabody Energy and Indonesia's Novem/Sinarma for mining coal jointly. At present, the coal major is conducting due diligence on five properties of these firms in Australia, USA and Indonesia.
"We are also scouting in South African nations," he said.
On the Naxal menace affecting the country's coal production, he said, "Wherever the law-and-order situation is not good, coal mining work is hampered. But the government has no plans to halt mining in those areas."
Many coal-bearing states, including Jharkhand and Orissa, are Naxal-infested.
India produced 531 million tonnes of coal during the last fiscal, out of which CIL's output stood at 431.5 million tonnes.