CIL net worth to jump by Rs 12K cr from 2012-13

The nerworth of Coal India, which launched its IPO today, would witness a sharp jump of around Rs 12,000 crore to about Rs 36,000 crore ($8.4 billion) by 2012-13 when it adopts international accounting standards.

"Once we adopt IFRS accounting standard we will get back some Rs 12,000 crore from provision kept as 'overburden removal reserve' used in our traditional accounting system of our mines. This will boost our networth from 2012-13," CIL chairman Partha Bhattacharyya said.

At present, the net worth of Coal India is $6 billion (around Rs 25,000 crore), he said.

Moreover, the company will increase its profitability by another 50 per cent due to better realisation of coal price with increasing washed coal from 2016-17.

"We will increase washed coal to 40 per cent of the total production from mere three per cent now from 2016-17. Washed coal will increase our realisation by another around 50 per cent than raw coal," Bhattacharyya said.

CIL has already firmed up 20 coal washeries to wash some 111 million tonne coal at a cost of Rs 2328 crore.

The coal major was also spending Rs 330 crore in the next two years for exploration of coal reserves in some 49 open cast mines.

The annual capex by the company will be Rs 3,800 crore but this will get increased to Rs 4,600 crore after work for coal washeries will begin from 2012.

Coal India today launched its mega initial public offer to raise around Rs 15,000 crore. The IPO of the world's largest coal producer is priced in the range of Rs 225 to Rs 245 per share.