Coal India may slip to Rs 280-285: SP Tulsian

Coal India may slip to Rs 280-285, says SP Tulsian, sptulsian.com.

Tulsian told CNBC-TV18, “Coal India, plan of the divestment will continue to remain on the drawing board of the government because when you have Rs 40,000 target for FY14 you can’t have that without divesting 10 percent in Coal India which can give them about Rs 19,000-20,000 crore. Now, that one thing is also certain that 10 percent stake cannot get divested in one block because there is no appetite for any company to go ahead with the offer for sale (OFS) of about Rs 19,000-20,000 crore that is bound to come in two or three tranches and that in my view will keep the share price subdued for the company. I won’t be surprised to see the price falling to about Rs 280-285.”
He further added, “One don’t expect any kind of significant improvement happening in the financial performance of the company. Even the production is not likely to get increased. They are already running behind the targets, 96 percent of the target has been met in the first 11 months of FY13 and in FY14 also I don’t think that 450 million tonne of production can be set as the target, as the realistic target by the company. So, taking all this into account the OFS is a biggest overhang on the share price which can make it to rule weaker only in the time to come.”