Coal India up 1% on subsidiaries share buyback; analysts mixed

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

Moneycontrol Bureau Shares of Coal India jumped over 1 percent intraday Monday riding on shares buy back. Its two subsidiaries Mahanadi Coalfields (MCL) and Northern Coalfields will buyback total shares worth around Rs 1,978 crore from their shareholders.Morgan Stanley feels subsidiaries buyback will be used by Coal India to buy back its own shares. It has an underweight rating on the stock with a target of Rs 245 per share. It adds that as Coal India has started the auction process for non-regulated sectors key to watch will be the price at which companies bid for the linkage supplies that were historically available on application basis. As per its estimates, a 20 percent increase in linkage auction price is likely in F17."While linkage auction will render CIL's realisation to be marketdetermined and ensure coal supply to the bidder, the upside for CIL is dependent on the bid premium. In the medium term, as the proportion of auctioned linkages rises, it could make CIL's realisations volatile," it says in a report.Nomura agrees that rising proportion of lower grade coal to keep realisation under pressure, earnings dent from wage revision may not be as high as investors fear. It has a buy rating with a target price of Rs 345 per share. Nomura also thinks that a share buyback seems imminent but quantum will likely lower the dividend payout in FY17. MCL buyback will represent 23.82 percent of the total number of equity shares in the paid-up share capital of MCL for an aggregate amount not exceeding Rs 1,028.77 crore, maximum buyback size, being up to 25 percent of the paid-up equity share capital and free reserves as on financial year ended March 31, 2016, it said. The buyback will be at a price of Rs 23,171.89 per equity shares payable in cashNorthern Coalfields will buy back shares for an aggregate amount not exceeding Rs 948.72 crore. The buyback represents 22.62 percent of the total number of equity shares in the paid-up share capital of the NGL. The company's board has approved buyback at a price of Rs 23,610.04 per equity shares payable in cash. The government has issued a policy, where if a Central Public Sector Enterprises (CPSE) meets certain criteria, it will have to buy back shares. At 10:13 hrs Coal India was quoting at Rs 310.20, up Rs 3.05, or 0.99 percent on the BSE.Posted by Nasrin SultanaFollow @NasrinzStory