Kolkata based Coal India, a Navratna PSU, is expected to launch its IPO in October 2010 this year to raise

around Rs 14,000 crore. With the largest IPO in the Indian Capital Market history till date, CIL is all set to acquire the Maharatna status. Navratna and the Maharatna status is accorded by the Department of Public Enterprises, GoI as per certain laid down norms and to qualify as a Maharatna, listing on the Indian Stock Exchange is a critical milestone. Coal India, was awarded the Navratna status in 2008 and as per the norms it was permitted to make investment proposals up to Rs 1000 crore or 15% of their net worth on a single project without the nod of the government. Now with an annual turnover of approximately Rs 52,000 crore in financial year 2009-2010, the company which has surpassed all the parameters apart from listing for becoming a Maharatna is all set to enjoy the status once the listing process is completed in October 2010. The recognition will raise the companys investment ceiling to 15% of the net worth with an upper limit of Rs 5000 crore without prior approval of the government. At present, four PSUs enjoy the coveted position namely ONGC, Indian Oil, Steel Authority of India and NTPC. Coal India contributed approximately 82% of the total coal production in India in fiscal 2009. Coal contributes 53 per cent of Indias energy needs while oil bears 29 per cent share with oil and natural gas together contributing around 42 percent. With rising oil prices and difficulty in exploring oil within the country, India must depend on coal as a major source of energy in times to come. Demand for coal is thus growing every year at a steady pace. Domestic production is not sufficient to meet the rising demand and to fulfill this shortage the country has to import coal. To meet the domestic demand of coal, CIL with a long term view, also intends to build its coal resources by identifying investment opportunities in Africa, Indonesia and the Asian Pacific Region. Coal India is also working to bridge the demand and supply gap by acquiring coal-equity abroad. The company is in negotiation with Peabody Energy. It is also in the process of issuing a global tender on long-term purchase contract for coal. Once granted the Maharatna status, the company will find it easier to conclude such deals at a fast pace without waiting for government clearance. Fast strike is an essential part of any international negotiation. More so due to rush for mineral assets by different countries. greater financial and administrative autonomy in the wake of Maharatna status will allow Coal India to encash the situation effectively. This will also enable the company in undertake joint ventures valuing 50 percent of the net worth, which was earlier limited to 30 percent in the Navratna category. In order to qualify as a Maharatna, the company should post an average annual net worth of more than Rs 15000 crore, an average annual net profit of more than Rs 5000 crore and an average annual turnover of more than Rs 25000 crore during the last three years. Coal Indias net worth was above Rs 15,000 crore, whereas it has successfully posted a net profit of above Rs 5000 crore in the past three years. Its turnover was above Rs 25000 crore in fiscal 2008 and 2009 and approximately Rs 52,000 crore in the last fiscal.

The final hurdle that Coal India has to cross for Maharatna status is listing.