Ahead of its planned initial public offering (IPO), the public sector Coal India Ltd (CIL) is planning to go in for a stock split to improve the retail affordability of its shares. Accordingly, the navratna PSU is seeking government approval for splitting its shares of Rs. 1,000 each to Rs. 10 per share. The company is also planning a preferential allotment, for giving shares to its employees. Besides, it has sought government nod for getting a fair valuation of its share price. “A host of preparatory actions are being taken by the company which is also getting converted from a private limited company to a public limited one,” Chairman P. S. Bhattacharyya told The Hindu. CIL now has an equity base of Rs. 6,316 crore and a net worth of Rs. 19,165 crore as on March 31, 2009.
Alongside, CIL is planning to form a ‘Trust’, which will hold the shares proposed to be offered to its prospective land-givers. “Offering shares of the projects that they were giving up their lands for, would be a way of rewarding people who gave their land,” officials felt. The price of these shares would be fixed on a fair value basis. For this, CIL is proposing to approach the Disinvestment Ministry and its parent Coal Ministry for getting a valuation done.
In order to fulfil the condition of a navratna, CIL will have to go public by October 2011. The company was accorded the navratna status in October 2008. CIL had 4.11 lakh employees on its rolls as on May 31, 2009. Senior officials in the Disinvestment Ministry told The Hindu that while CIL’s IPO was at least a year away, it would be an interesting case to watch, being the single-biggest coal producer in the world. CIL’s IPO would be from disinvestment of government shares.