New Delhi: The Ministry of Coal has reached out to Coal India Ltd (CIL), proposing the listing of its consultancy arm Central Mine Planning and Design Institute (CMPDIL) on the bourses and the divestment of its 10 percent paid-up capital, two sources aware of the matter told PSU Watch. The ministry has sent a letter to CIL for taking necessary actions, has asked CIL to take up the issue with its Board of Directors and "send the said approval to the Ministry of Coal for getting further clearances," the sources said.
CMPDIL is a wholly-owned subsidiary of CIL and listing it separately would involve spinning it out as an independent company. After the CIL board's approval, CMPDIL will have to pass a special resolution convening a meeting of its shareholders and a valuation report will have to be placed before them. Spinning off CMPDIL from CIL will also reduce Coal India's share capital and will call for amendments in the memorandum of association, one of the two sources quoted above said.
The government has been mulling spinning off CIL's profit-making subsidiaries after a proposal was made by Niti Aayog in this regard. The Department of Investment and Public Asset Management (DIPAM) has been examining proposals to list Coal India's profit-making subsidiaries on the bourses since 2019. According to the letter addressed to Coal India by the Ministry of Coal, listing subsidiaries would "improve their functioning." And the process is to be started with CMPDIL.
CMPDIL has been a profit-making subsidiary of CIL for the last five years. At the end of FY21, CMPDIL's net worth was Rs 787.47 crore.
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