Coal India Slips As Buyback Offer Disappoints Market

Coal India Slips As Buyback Offer Disappoints Market
Shares of Coal India fell as much as 2.36 per cent to hit intraday low of Rs. 313.30 after the state-run miner’s buyback offer disappointed the Street.

Coal India aftermarket hours yesterday had announced that its board has approved share buyback of 1.72 per cent of shares at a price of Rs. 335 per share. The proposed buyback will cost Coal India Rs. 3,650 crore.

The buyback price of Rs. 335 is just 4.4 per cent premium to yesterday’s close of 320.90.

Since the government owns nearly 80 per cent of Coal India, it would be the primary beneficiary of the buyback offer.

Coal India is the latest public sector unit to come out with a buyback offer. With public sector companies sitting on an estimated cash pile of Rs. 2.6 lakh crore, leveraging surplus cash of PSU units is one of the options for the government to bridge its fiscal deficit.

Shares of Coal India ended 1.2 per cent lower at Rs. 317.05.