Moneycontrol Bureau
Shares of Coal India jumped over 5 percent, hitting a two-month high in early trade on Wednesday. Investors are euphoric about the company as last evening it declared an interim dividend of Rs 29 per share, amounting to Rs 18,317 crore, for 2013-14.
The company will pay the dividend from January 25. The government will get Rs 16,485.71 crore for its 90 percent stake in the Maharatna company.
“Currently, Coal India January future is trading at a discount of Rs12.85/share. The given discount was in anticipation of the dividend expected during the month. However, the total dividend exceeds 10 percent of the current market value. Hence, the futures and options segment is likely to react differently,” says ICICI Direct in a report. Meanwhile, the government is on an overdrive to meet the disinvestment target of Rs 40,000 crore this fiscal. Coal India dividend comes in the backdrop of government failure to disinvest 10 percent of company's shares in this year. Trade unions were opposed to further disinvestment of Coal India which was listed in November, 2010 after a blockbuster initial public offer.
At 09:26 hrs, the stock was quoting at Rs 296.00, up Rs 6.10, or 2.10 percent. It surpassed the Rs 300 level for the first time since November 7, 2013.
(With inputs from PTI)
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