Coal news and updates

India is seeking a record dividend of Rs.15,000 crore ($2.4 billion) from Coal India Ltd, the world’s largest producer, to raise funds to help meet a budget-deficit target, said two finance ministry officials with direct knowledge of the matter.

The government also intends to tap another state-owned company, NMDC Ltd, for Rs.2,500 crore via a special dividend or share buyback, and sell half of its 21% stake in Axis Bank Ltd for about Rs.6,000 crore, the officials said. They asked not to be identified as the deliberations are private.

The officials said the finance ministry expects to raise only Rs.15,000 crore of the targeted Rs.40,000 crore from the sale of shares in state-owned companies for the year ending March 2014. That’s adding pressure to extract special dividends as the government pushes to prevent a sovereign credit-rating downgrade to so-called junk status.

Finance ministry spokesman D.S. Malik declined to comment on the plan to raise funds.

The government plans to raise Rs.54,000 crore in total share sales this fiscal year, including Rs.14,000 crore from legacy holdings in private businesses such as Axis Bank. The administration has raised Rs.1,330 crore with three months of the fiscal year to go.

Coal India’s highest dividend since listing on the stock exchange in 2010 was the Rs.8,840 crore paid in the year ending March 2013, according to data compiled by Bloomberg. NMDC, India’s largest iron ore miner, paid Rs.2,780 crore for that period.

Coal India, which tumbled 18.3% in 2013, gained 0.8% to Rs.279.75 as of 2:06pm in Mumbai. NMDC lost 1.3% and Axis Bank shares dropped 1.1%, while the benchmark S&P BSE Sensex fell 0.4%.

Prime Minister Manmohan Singh set a goal to pare the budget deficit to a six-year low of 4.8% of gross domestic product this fiscal year. The shortfall in the eight months through November reached 94% of the full-year target of Rs.5.4 trillion.

India’s credit rating may be cut to junk in 2014 unless the general election due by May leads to a government capable of reviving economic growth, Standard and Poor’s said in November.

 

 

Source: http://www.livemint.com/