Coal India set to end fiscal with Rs 6,000-crore bonanza

KOLKATA: Five profit-making subsidiaries of Coal India will hand over about Rs 6,000 crore to the parent company through a mix of share buybacks and dividends by the end of next month.

This is the first time Central Coalfields, South Eastern Coalfields, Western Coalfields, Mahanadi Coalfields and Northern Coalfields will be purchasing their own shares. All eight subsidiaries of Coal India are unlisted.

"A government directive has asked profit-making subsidiaries of Coal India to undertake share buybacks this year in addition to the regular dividends they pay to Coal India. As part of this directive, the profit-making subsidiaries of Coal India have committed around Rs 6,000 crore," a senior Coal India executive told ET.

On a standalone basis, Coal India declared a net loss of Rs 39 crore for the third quarter of 2016-17, primarily because its subsidiaries had not paid any dividend to the company and it had to shell out Rs 3,650 crore for buying back its own shares from the government and other shareholders.

"Once the share buybacks are executed and dividend paid, the coal monopoly will bounce back into black and be in a position of announce dividends for its shareholders too," the executive, who did not wish to be named, said.

As part of the government’s directive, the board of South Eastern Coalfields on Monday decided to buy back 4.18% of its shares numbering 1.5 lakh of face value Rs 1,000 each from its parent, at Rs 79,777 per share, totalling Rs 1,200 crore.

Last week, the board of Northern Coalfields, had decided to hand over Coal India Rs1,244 crore through a 4.3% buyback programme. Northern Coalfields would be buying back about 75,000 shares of face value Rs 1,000 at Rs1.63 lakh per share. Another Coal India executive said.

Coal India Ltd