Coal India Limited (CIL) is one of the worlds biggest coal mining companies and is headquartered in Kolkata, West Bengal, India It’s revenue was at Rs 45,797 Cr or the U.S $10.3 billion approximately for the financial year 2008-09. It is under the administrative control of the Ministry of Coal. In October 2010, Coal India’s IPO opened creating a new record in the history of Indian Capital Markets by getting oversubscribed by 25 times and by receiving a cumulative demand for US$ 53 billion. The listing data for Coal India has been fixed for the 4th of November 2010. Retain Investors are expected to get a discount price of 5 % and 100 % allotment.
History of Coal India Limited
In order to provide for higher growth in the coal sector to meet the growing energy needs of the country, the Government in 1973, nationalized the coal mines by enacting the Coal Nationalization Act. Pursuant to the nationalization of coal mines, our Company was incorporated as a private limited company with the name of ‘Coal Mines Authority Limited’, under the Companies Act on June 14, 1973, and in terms of notification no. G.S.R. 345(F) dated July 9, 1973, issued pursuant to the provisions of Section 5 of the Coal Nationalization Act certain nationalized coal mines were vested in our Company by the Central Government.
Thereafter in 1975, the Department of Coal, Ministry of Energy, GoI, with a view to integrate and streamline the structural set up in a manner that could be conducive to a more efficient administration, issued letter no. 38011/1/1/74-CAF dated September 27, 1975, providing for the re-organization of ‘Coal Mines Authority Limited’ as ‘Coal India Limited’, which was to be responsible for the entire coal mining sector owned and controlled by the Central Government.
Pursuant to the nationalization of coal mines and during the period up to 1991, our Company was able to enhance the growth rate of coal production from a CAGR of 2.18% at the time of nationalization in Fiscal 1974 to a CAGR of 5.63% by Fiscal 1991. However during this period, due to certain macro-economic and socio-economic factors, our Company continued to operate certain legacy mines inherited pursuant to the nationalization and to operate certain new projects irrespective of financial viability.
Further, on account of certain internal reasons and policy issues, our Company’s accumulated losses in Fiscal 1991 and overdue liabilities to the Government in Fiscal 1993, reached Rs. 24,989.80 million and Rs. 23,113.10 million respectively. Thereafter, post-1991 upon our Company achieving certain milestones and certain policy changes initiated by the Government our Company endeavoured to consolidate its financial position. The ‘Major Events and Milestones’ of our Company since inception is listed below.
Major Events and Milestones at Coal India:
|2009-10 :||Award of the Scope Excellence Award to our Company by the Standing Conference of Public Enterprises for the year 2007-08.
Establishment of Coal India Africana Limitada, a foreign subsidiary in Mozambique;
Conversion of our Company into a public limited company.
Award of ‘Mini Ratna’ status by the Department of Public Enterprises, GoI, to CMPDIL.
Receipt by our Company of a composite score of 1.47 and rating as “excellent” for the year 2007-2008 by Department of Public Enterprises, Ministry of Heavy Industries & Public Enterprises, GoI.
|2008-09 :||Award of ‘Navratna’ status to our Company by the Department of Public Enterprises, GoI, for our operational efficiency and financial strength, which affords greater operational freedom and autonomy in decision making.
The overall production of coal by our Company and our Subsidiaries crossed 400 million tonnes.
|2007-08 :||Award of ‘Mini Ratna’ status by the Department of Public Enterprises, GoI, to CCL.|
|2006-07 :||Award of ‘Mini Ratna’ status by the Department of Public Enterprises, GoI, to our Company and to MCL, NCL, SECL and WCL.
The decline in debt as a percentage of net worth from 66 % in 2001-2002 to 10 % in 2006 -2007.
|2005-06 :||Rating of ‘AAA/Stable’, indicating the highest degree of safety with regard to the timely payment of interest and principal, awarded by CRISIL in respect of the Rs. 250 million bond programme of our Company.
Introduction of sale of coal through ‘e-auction method’;
ECL and BCCL reported a profit of Rs. 3,638 million and 2,026.67 million in Fiscal 2006.
|2003-04 :||The overall production of coal by our Company and our Subsidiaries crosses 300 million tonnes.|
|2001-02 :||Laying down of a minimum internal rate of return of 12% at 85% capacity utilization as cut off for the development of a project.|
|1997-98 :||Corporatization of the financial flow between our Company and Subsidiaries, such that our Company is to receive only dividends under the applicable policy from our Subsidiaries and the corpus of our Company was to be utilized to provide strategic support to a loss-making entity only for, inter alia, maintaining their productive capital assets.
Sanction of a loan of USD 1.03 billion from the World Bank and the Japanese Bank for International Co-operation for implementing 24 highly viable open case projects with global sourcing of equipment, of which USD 484.40 million was availed during the period between Fiscal 1998 to Fiscal 2004.
|1996-97 :||Rating of ‘A+’, indicating adequate safety with regard to the timely payment of interest and principal, awarded by CRISIL in respect of the Rs. 4,000 million bond issue by our Company.
Adoption of financial viability as the basis for approval of coal development projects.
Discontinuation of retention prices scheme and the Coal Price Regulation Account (CPRA), with the deregulation in prices of certain grades of coal.
|1995-96 :||Approval of a financial restructuring package by the Government, whereby Rs. 8,917 million of interest liability was waived, Rs. 9,041.8 million of plan loan repayment arrears were converted to preference equity and Rs. 4,326.4 million of nonplan payment arrears were allowed a moratorium for repayment and interest accrual for a period of three years, to be repaid in three equal installments.
A profit of Rs. 6,116 million in Fiscal 1996 was earned by our Company.
|1992-93 :||Formation of MCL as our Subsidiary to manage mines Talcher and IB valley in the state of Orissa.|
|1991-92 :||The uptrend of profit started in 1991 and our Company earned a profit of Rs. 1,670 million in Fiscal 1992.
The overall production of coal by our Company and our Subsidiaries crossed 200 million tonnes.
Fixing of coal prices once a year to compensate for the increase in the price of inputs on a normative cost basis, and adoption of the escalation formula prescribed by the Bureau of Industrial Cost and Prices (“BICP”).
|1987-88 :||‘Blasting Gallery Method’ introduced at East Katras mine under BCCL and Chora mine under ECL.|
|1985-86 :||Formation of NCL and SECL as Subsidiaries of our Company, to manage certain mines managed by WCL and CCL.|
|1981-82 :||Introduction of retention prices of coal by amending the Colliery Control Order, 1945 by notification dated March 31, 1982, in respect of our Subsidiaries.|
|1980-81 :||Construction of five new washeries: Moonidih washery, Ramgarh washery, Mohuda washery, Barora washery, Kedla washery.
The overall production of coal by our Company and our Subsidiaries crossed 100 million tonnes.
|1979-80 :||Construction of the low temperature carbonized plant started in Dankuni Coal Complex.
The pricing policy of CMPDIL was reviewed to ensure that the company was working on a commercial line instead of working on a “no profit no loss” basis.
|1975-76 :||Change of name of our Company to ‘Coal India Limited’.
Incorporation of CMPDIL, ECL and WCL, and formation of BCCL, CCL, CMPDIL, ECL and WCL, as our Subsidiaries.
|1973-74 :||Nationalization of coal mines, in order to provide for higher growth in the coal sector to meet the growing energy needs of the country.
Incorporation of our Company as ‘Coal Mines Authority Limited’.