Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Coal India Will Pay Record $3 Billion Interim Dividend

A Worker Collects Coal at a Wholesale Market in Mumbai
A worker collects coal by hand at a coal wholesale market in Mumbai. Until now, the highest dividend Coal India had paid since listing in 2010 was 88.4 billion rupees for the year ended March last year, according to data compiled by Bloomberg. Photographer: Dhiraj Singh/Bloomberg

Jan. 14 (Bloomberg) -- Coal India Ltd., the world’s largest producer, will pay a record dividend of 183 billion rupees ($3 billion) to help the government cut its budget deficit.

The company, owned 90 percent by the government, will make an interim payment of 29 rupees a share for the year ending March 31, according to a stock exchange statement today. The dividend will be paid starting Jan. 25, it said.

The finance ministry expects to raise 150 billion rupees selling shares in state-owned companies for the year ending March 31, less than half its targeted amount. That’s adding pressure to extract special dividends as the government pushes to prevent a sovereign credit-rating downgrade to so-called junk.

“The special dividend gives some relief to investors at a time when the company is facing challenges to its earnings growth,” said Giriraj Daga, a Mumbai analyst at Nirmal Bang Equities Pvt., who has a sell recommendation on Coal India. “For a longer term improvement in the stock, investors will be looking at consistent higher dividend payouts.”

Coal India shares fell 0.5 percent to 288.90 rupees in Mumbai. The dividend was announced after trading ended. The benchmark S&P BSE Sensex also fell 0.5 percent.

Until now, the highest dividend Coal India had paid since listing in 2010 was 88.4 billion rupees for the year ended March last year, according to data compiled by Bloomberg.

Prime Minister Manmohan Singh set a goal to pare the budget deficit to a six-year low of 4.8 percent of gross domestic product this fiscal year. The shortfall in the eight months through November reached 94 percent of the full-year target of 5.4 trillion rupees.

India’s credit rating may be cut to junk in 2014 unless the general election due by May leads to a government capable of reviving economic growth, Standard & Poor’s said in November.

To contact the reporter on this story: Rajesh Kumar Singh in New Delhi at rsingh133@bloomberg.net

To contact the editor responsible for this story: Andrew Hobbs at ahobbs4@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.