CIL Likely To Hit Mkt With IPO

New Delhi: Coal India Ltd (CIL) is hoped to hit the market with its much-waited IPO before the end of the first quarter or the starting of the second quarter of the 2007-08 fiscal. The exercise is likely to pass political muster since it will not be a disinvestment in the traditional sense but issue of fresh capital. The move follows the recent call from the Prime Minister, Dr Manmohan Singh, to the public sector enterprises to get listed on bourses, which may lead to unleashing of their entrepreneurial capabilities. Having converted all its subsidiaries into profit-making entities, CIL now mulls to hit the capital market with a public offer of five per cent of the paid-up capital through the book-building route. The intention is to mop up Rs 4,000-4,500 crore. The company will be sending a letter to the Ministry on the issue very soon. As a matter of priority, the first step will be to fill up the posts of independent directors in CIL and all its subsidiaries. CIL has an equity base of Rs 6,316 crore. It is the holding company of seven coal producing companies. They are: Northern Coalfields Ltd, South Eastern Coalfields Ltd, Western Coalfields Ltd, Mahanadi Coalfields Ltd, Eastern Coalfields Ltd, Bharat Coking Coal Ltd and Central Coalfields Ltd. CIL is also the holding company of Coal Mining and Development Planning Institution, the R&D arm. CIL is likely to go public and not its subsidiaries. During April-January this fiscal, CIL and subsidiaries posted an aggregate pre-tax profit of more than Rs 5,800 crore. At this rate, the aggregate profit of coal companies for the full fiscal is expected to exceed the target of Rs 7,043 crore on a pre-tax basis.