Coal India board to discuss share buyback

KOLKATA: The board of directors of Coal India will consider a proposal to buy back its shares at a meeting scheduled on July 11. CIL is likely to place a proposal to buy back 25 per cent of its equity capital along with free reserves that would fetch the government close to Rs 6,000 crore.

At present the government holds a shade over 80 per cent in Coal India while the rest is held by financial institutions and public shareholders. Following the buy-back government’s stake in the company in likely to decline by 2-3 per cent depending on the quantum subscribed by financial institutions and general public.

The development comes after five Coal India subsidiaries announced share buy-back which would fetch Coal India a total of Rs 5,000 crore.

Last year CIL paid Rs 17,308 crore to the government which was a mix of dividend and dividend distribution tax. Part of it was paid out of the cash reserves. During 2014-15, Coal India paid Rs 12,940 crore under the same head.