Eksplorasi.id – Coal India Ltd., the world’s biggest producer of the fuel, said it will buy back shares from investors worth 36.5 billion rupees ($544 million). Concerns over utilization of the company’s cash hoard caused the stock to decline.
The Kolkata-based miner will buy back as many as 108.95 million shares at 335 rupees each, a 4.4 percent premium to its closing price Monday. The company made the announcement in a stock exchange filing late Monday after its board approved the plan. The stock declined as much as 2.4 percent to 313.30 rupees in Mumbai on Tuesday.
“The enthusiasm about the buyback has been priced in and now concerns are weighing on the stock,” said Deven Choksey, managing director at KR Choksey Shares & Securities Pvt. in Mumbai. The worry is “mainly over lack of clarity on how Coal India will use its surplus cash to improve operations and profitability,” he said.
The company plans to invest 626 billion rupees to achieve its output target of 1 billion tons by 2020, coal minister Piyush Goyal told lawmakers last year.
Eksplorasi | Bloomberg
