The board of state-owned Coal India (CIL) on Monday approved to buy back 4,46,80,850 of its equity shares, or 0.72 per cent of its total outstanding shares, at Rs 235 per share to raise Rs 1,050 crore. The record date for transaction has been decided to be February 15.
The government with 72.9 per cent shareholding in the company will at least get Rs 766 crore out of the proceeds, and the government’s share may increase in case private shareholders do not participate in the buyback programme. The shares of CIL on Monday lost 0.54 per cent to close at Rs 222.05 apiece.
The approval by CIL board comes within a week of the boards of three CIL subsidiaries — Mahanadi Coalfields, Northern Coalfields and South Eastern Coalfields — approving to buy back their shares in the parent. The total amount that will accrue to CIL from this exercise is Rs 1,065 crore.
To make up for the big shortfall in indirect tax revenue — the collections in April-November were hardly 2 per cent higher than the year-ago period versus FY19 growth estimate of 22 per cent — the Centre has asked a clutch of central PSUs to speed up their planned share buybacks.
Apart from CIL, other PSUs to undertake buyback before the fiscal-end include ONGC, Indian Oil and Oil India. NLC, Cochin Shipyard, Bhel, NHPC, Nalco and KIOCL have already done buyback this year. Against the current financial year’s disinvestment target of Rs 80,000 crore, the government has been able to raise Rs 35,500 crore so far, of which 77 per cent has come from exchange-traded funds. For FY20, the government has even set a stiffer target of Rs 90,000 crore through disinvestments. —FE