Govt may hive off Coal India into separate listed firms to raise funds

International News

India may spin off units of Coal India Ltd, the world's largest coal miner, into separate listed companies to boost competition and raise government funds, according to people with knowledge of the matter.
The state-run company and the coal ministry are studying a proposal by the finance ministry's Department of Investment & Public Asset Management to list four of Coal India's biggest production units, as well as its exploration arm, said the people, who asked not to be named as the plan isn't public. The development is in an early stage and it was unclear how long it may take, the people added.
Prime Minister Narendra Modi's government has sought to sell some state assets to raise funds, and these divestments will continue to remain a priority, Finance Minister Nirmala Sitharaman said July 5, setting a record target of raising Rs 1.05 trillion ($15 billion) in the current fiscal year. Spinning off Coal India subsidiaries would also lead to greater competition in the domestic coal market and improve corporate governance, the people said.
A spokesman at Coal India didn't respond to requests seeking comment, while press officials at the coal and finance ministries declined to comment.
The four units -- Mahanadi Coalfields, South Eastern Coalfields, Northern Coalfields and Central Coalfields -- account for more than three-fourths of the company's output, while constituting less than half of its workforce. The fifth unit would be Central Mine Planning & Design Institute.

 India's state run coal giant has been unable to meet growing demand despite abundant resources. Coal India produced a record 607 million metric tons in the last fiscal year to March, falling short by 22 per cent of a target proposed in 2017...Read More