Coal India slumps as GoM approves 26% profit-sharing for coal companies

Coal India lost 5.14% at Rs 374 at 9:34 IST on BSE on reports a panel of ministers has approved the draft Mining Bill whereby coal miners are required to share 26% of their profits with local communities.

Meanwhile, the BSE Sensex was up 14.66 points, or 0.08%, to 19,092.96.



On BSE, 11.95 lakh shares were traded in the counter as against an average daily volume of 8.75 lakh shares in the past one quarter.

The stock hit a high of Rs 383.25 and a low of Rs 361 so far during the day. The stock had hit a record high of Rs 422.30 on 31 May 2011 and a record low of Rs 287.45 on 4 November 2010.

The stock had underperformed the market over the past one month until 7 July 2011, sliding 2.17% compared with the Sensex's 3.15% rise. The scrip had, however, outperformed the market in past one quarter, gaining 9.74% as against 2.62% decline in the Sensex.

The large-cap state-run coal miner has equity capital of Rs 6316.36 crore. Face value per share is Rs 10.

The draft Mining Bill approved by a 10-member Group of Ministers (GoM) headed by Finance Minister Pranab Mukherjee on Thursday, 7 July 2011 says coal companies will have to share 26% profit with the local population so as to compensate people affected by such projects. According to the reports, the draft bill will now go to the Cabinet for approval. The proposal also calls for other miners to give to local communities an amount equivalent to royalties so as to compensate people displaced by such projects. The bill requires parliamentary approval after passing by the Cabinet to become a law.

On a consolidated basis, Coal India's net profit rose 12.9% to Rs 10867.35 crore on 12.6% increase in net sales to Rs 50233.59 crore in the year ended March 2011 over the year ended March 2010.

Coal India produces and markets coal and coal products, as well as provides related consulting services.