Coal India IPO in July 2010
India’s largest coal producer, Coal India Ltd (CIL), expects to hit the capital markets by July. The government, which holds 100 per cent stake in CIL, will divest 10 per cent through an initial public offer (IPO) of 63.1 crore shares. The company will reserve 6.3 crore shares for its employees.
The draft red herring prospectus shall be filed for the issue with Securities Exchange Board of India by mid-June post the annual general meeting. The company’s net profit would be around $1.7 billion in the current fiscal. The company is now producing 430 million tonnes of coal, which is expected to reach 700 million tonnes over the next 10 years.
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Comments
Auction of coal, apart from being an anti-constitution policy for sale of a vital national resource, is a method of extra profiteering by a monopolistic organization viz. CIL & its Subsidiary Coal Companies including Central Coalfields Limited (CCL) which was formed by Govt. of India for reasons & priorities other than the malafide extra-constitutional & illegal profiteering as is being done by CIL & CCL through auction of coal. Moreover, the reply given by CIL itself clearly states that the notified price of coal takes care of –
1. Increase in input cost for production of coal.
2. The movement of AICPI and WPI
3. Demand and supply scenario.
4. Landed cost of imported coal.
5. Requirement of fund for investment in upcoming projects and modernization of existing mines for augmentation of production.
6. Financial viability of new coal projects.
Under the circumstances, it may kindly be appreciated that when all costs & future costs, as per the objective of the public sectors, are already been taken care of in the notified price itself then there does not seem to be any reason to allow such malafide extra-constitutional & illegal profiteering by a public sector undertaking because there is no logical and/or legal reasons behind such action except, as it appears, the motive of the Directors of the Company of seeking personal gains/publicity by over inflating the profit of the company.
10. That in this regard it is also relevant to mention that the Hon’ble Supreme Court of India had also earlier observed against the malafide extra-constitutional & illegal profiteering as is being done by CIL & CCL through auction of coal, in Ashoka Smokeless Coal Industries Pvt. Ltd. & Others –vrs- CIL & others.
11. That it has been informed that the situation has gradually become so grave that even the National Thermal Power Corporation (NTPC) has been forced to take some coal through Auction from CCL. Further, if this malafide extra-constitutional & illegal profiteering, as is being done by CIL & CCL through auction of coal, is allowed to be continued then a day may come when in a democratic setup the Oil Companies, Food Corporations, Textile Corporations etc. may also start selling their products through Auction as is being done by CCL, then it will become difficult for common men to even survive in our country which is a SOVEREIGN SOCIALIST SECULAR DEMOCRATIC REPUBLIC guaranteeing EQUALITY of status and of opportunity including economic opportunity to one and all citizens of the country irrespective of their being rich or poor.
the company is entangled with alot of litigation involving their stock as well as their contractual discrepancies. the chairman himself is under question for corruption, then come the other various GM,s and CMDs who have either criminal cases pending against them or already behind bars. one of the recent issues in the news being aboput their coal distribution policy which is under CBI investigation. they employ around 4lakh people all over the country, have the chairman travel in chartered flights and in the same company the top level subsidy CMDs are arrested for accepting bribe amounts.
Investing in coal company is very lucrative but with shaddy and checkered history like this one can only hope its not just another satyam in the making.