Coal India Plans IPO For Subsidiaries BCCL, CMPDI In FY 2024-25
Coal India is gearing up to launch the initial public offer (IPO) for its subsidiaries Bharat Coking Coal (BCCL) and the Central Mine Planning and Design Institute (CMPDI) in the financial year 2024-25, according to media reports.
While the company had previously announced plans for the divestment of 25 per cent of the paid-up share capital of BCCL and its subsequent listing on the stock exchanges back in 2022, the actual listing has been pending.
However, a government official revealed that the process is currently underway and is expected to materialise by the next financial year.
BCCL, which has now turned profitable and cleared its debts, reported an annual profit after tax of Rs 645.01 crore during 2022-23, a significant increase from Rs 111.62 crore in the previous fiscal year. Similarly, CMPDI recorded a net profit of Rs 296.66 crore in FY23 compared to Rs 282.12 crore in FY22.
BCCL, primarily responsible for producing the bulk of coking coal in India, plays a pivotal role in meeting 50 per cent of the total requirement of this essential input for the steel industry. On the other hand, CMPDI, headquartered in Ranchi, serves as Coal India's consultancy arm, providing research and support for mineral exploration, mining, and infrastructure engineering.
The government has abandoned its earlier plans of merging the seven subsidiaries into Coal India and is now focused on freeing BCCL and Eastern Coalfields (ECL) from the obligations of fuel supply agreements (FSAs). This move aims to enable BCCL and ECL to sell their produce in the open market, enhancing their operational flexibility and financial performance.
Coal India's IPO was the largest PSU IPO, raising Rs 15,199 crore till May 2022, before LIC surpassed it with a mobilisation of Rs 21,008 crore via its IPO. The government, which currently holds 63.13 per cent stake in the coal miner, has conducted various stake sales in Coal India through offer for sales and exchange-traded funds (ETFs) in the past.
With Coal India likely to exceed its capex target for the current financial year, the company is also contemplating reducing its coal production in 2024-25 to address the challenge of accumulating stocks, which have reached an all-time high of over 38 million tonnes.
