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Coal India declares interim dividend of Rs 29/share

As the majority stake holder, the government is likely to get around Rs 16,000 crore

Probal Basak  |  Kolkata 

Meeting the street expectaion, Coal India borad today has approved a special dividend for the current financial year, which would fetch Rs 16485.71 crore to government exchequer and help meet its disinvestment target of Rs 40,000 crore.

The CIL board, which met here today, approved highest ever interim dividend of Rs 29 per share of face value of Rs 10. “The total out-go from the company would be around Rs18,317.46 crore out of which Government of India who holds 90% of company’s shares would get Rs 16,485.71 crore,” CIL CMD S Narasing Rao told reporters after the board meet.

Beside, government would also get dividend distribution tax of Rs 3,113.05 crore from CIL and its subsidiaries. Thus government would get Rs 19,598.76 crore from CIL and its subsidiaries by way of dividend and its tax.

This dividend would be disbursed on and from January 25, 2014 to those shareholders who are holding the CIL shares on january 20, 2014.

In 2012-13, Coal India (CIL) had paid a total dividend of Rs 8,842.91 crore to the government.

Dividend from CIL will help the government to meet its disinvestment target. Many of government's stake-sale plan had hit roadblocks in recent times, including that of CIL. In such a scenario, as an alternative measure to meet its disinvestment target of Rs 40,000 crore for current financial year, government was seeking for dividends from cash-rich PSUs like CIL. Toeing that line, CIL, whose cash and bank balance stood at Rs 43,776 crore at the end of 2012-13, today declared the special divided.

Incidentally, earlier last year an inter-ministerial panel had cleared 10% stake sale in CIL through the offer for sale (OFS) route , which is expected to fetch the exchequer about Rs 20,000 crore. The government later climbed down from its initial stand in the wake of workers' opposition to the move and decided to go for five% stake sale.

However, that too has hit roadblocks as a section of workers are still opposing the move. Also, officials suggest, the government too is waiting for a conducive market scenario to went ahead with the plan.

The street has been abuzz throughout the day over speculation that the government may force cash rich state-run firms to declare hefty interim dividend to enable the government to meet the fiscal deficit target for the current year. Shares of CIL today ended down 0.12% at Rs 289.90.

First Published: Tue, January 14 2014. 18:10 IST