Valuations Slashed by 3 Coal India Limited Subsidiaries by at least 75%
Coal India Limited’s 3 subsidiaries have slashed their share valuations by at least seventy five percent over the values declared earlier this month. According to the merchant banker of the listed monopoly miner, the earlier valuations did not reflect the true valuation of either the parent or the subsidiaries.
The interesting thing is that, even though the valuations have been reduced but the money to be received by Coal India post reduced valuation through share buybacks remains the same at Rs 5,063 crore.
4 of Coal India’s 8 subsidiaries which include Central Coalfields had announced share buybacks last month. As part of the exercise, the boards of these companies had valued their shares.
According to a Coal India executive who did not wish to be identified, the previous valuations included factors that are considered for valuing international companies, resulting in higher valuations.
A fresh valuation of 3 subsidiaries – Mahanadi Coalfields, South Eastern Coalfields and Northern Coalfields was thus conducted.
Previously, shares of Mahanadi Coalfields were valued at Rs 2.922 lakh per share of face value of Rs 1,000. This has been revised to Rs 35,796 per share.
Shares of South Eastern Coalfields were earlier valued at Rs 79,777 per share, it has been subsequently revalued at Rs 19,599 per share.
Shares of Northern Coalfields were valued at Rs 1.629 lakh per share of face value Rs 1,000 each. The valuation has been reduced to Rs 30,260 per share.
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