Coal India slips on divestment buzz

Coal India fell 3.08% to Rs 300.45 at 13:27 IST on BSE on reports the government is likely to dilute 5% stake in the company via follow-on public offer in December 2013.

Meanwhile, the BSE Sensex was down 113.31 points, or 0.57%, to 19,802.64.

On BSE, 4.48 lakh shares were traded in the counter compared with average volume of 2.31 lakh shares in the past one quarter.

The stock hit a high of Rs 308 and a low of Rs 298.50 so far during the day. The stock hit a record low of Rs 238.35 on 30 August 2013. The stock hit a 52-week high of Rs 374.05 on 3 December 2012.

The stock had outperformed the market over the past one month till 4 October 2013, rising 17.05% compared with the Sensex's 7.26% rise. The scrip had also outperformed the market in past one quarter, rising 3.64% as against Sensex's 2.60% rise.

The large-cap company has an equity capital of Rs 6316.36 crore. Face value per share is Rs 10.

Shares of Coal India tumbled on concerns that the floor price for the stake sale will be set at a discount to the ruling market price.

The 5% dilution will fetch close to Rs 10000 crore to government exchequer. The Government of India, which currently holds 90% stake in the company, reportedly intends to sell 31.60 lakh shares via follow-on public offer (FPO).

The government has set a target of raising Rs 40000 crore by selling its stake in public sector units (PSUs) in the year ending March 2014.

Coal India and its subsidiaries achieved 99% of targeted production at 33.16 million tonnes in September 2013. The company and its subsidiaries achieved 103% of targeted offtake at 35.79 million tonnes in September 2013.

Coal India's consolidated net profit fell 16.51% to Rs 3731.04 crore on 0.64% rise in total income to Rs 18692.03 crore in Q1 June 2013 over Q1 June 2012.

Coal India is the largest coal producer in the world.

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