NEW DELHI, Oct 12 (Reuters) - Coal India, the world's largest coal miner, is on its way to a public listing in India, slated to be the largest-ever in the country.
The state-run company is offering 631.6 million shares or 10 percent of the company that could fetch $3.5 billion. The IPO is slated to open on October 18. Following are some details on Coal India's operations:
FACTS AND FIGURES
- Coal India was founded in 1973 when the government nationalised many coal mines to boost output under its own supervision.
- The company made a net profit of 98.337 billion rupees ($2.21 billion) in 2009/10 (April-March) on revenues of 525.922 billion rupees.
- A 10 percent sale for $3.5 billion would imply a total value for the company of $35 billion with total share capital of 63.16 billion rupees.
- The company produced 431.26 million tonnes of coal in the year ending March 2010, up 6.82 percent year-on-year.
- The world's number two coal producer is China's Shenhua Group, that is seeing an output of 360 million tonnes in 2010.
- The monopoly producer accounts for over 80 percent of India's total coal output and is targeting production of 461.5 million tonnes in the current year which started in April.
- The company has 471 coal mines, mostly located in eastern and central India, seven subsidiaries and a workforce of 394,041 people. - It wants to expand overseas to bridge the yawning gap between India's demand and supply, and is in talks for buying mining stakes in Australia, Indonesia and the United States.
- Coal India has been importing small amounts of coal and plans to issue a tender for importing 6 million tonnes of coal this year mostly for power-maker NTPC Ltd.
- The company has a total of 18,862.9 million tons of total reserves of which 10,595.1 million tons are proven.
CHALLENGES
- Social problems are an obstacle to mine expansion with resistance from locals who are concerned about displacement.
- Maoists, who say they are opposed to capitalism and have attacked some other state-run firms in east India, are another hinderence to expansion.
- Bloated stocks of coal because of slow transportation have prompted top officials to consider moving into power generation to use the inventories.
- Coal India will face competition from foreign miners as the government moves to reform the coal sector and allow non-domestic players to bid for blocks in joint ventures.
- After selling shares, it will have to review its policy of discounting coal in order to strike a balance between its social obligations -- to keep power cheap -- and keeping investors happy with profits and dividends. ($1=44.55 rupees) (Compiled by Ruchira Singh and Prashant Mehra in MUMBAI; Editing by Muralikumar Anantharaman)