Shares of Coal India slipped 4 percent in early trade on Friday as its offer-for-sale (OFS) opens today. The floor price of OFS is fixed at Rs 358/share, a discount of around 4.5 percent from Thursday closing price. The government will divest upto 10 percent stake via OFS, by selling 31.58 crore shares with an option to sell additional 31.58 crore share. Brokerages are mixed on the stock with Edelweiss upgrading it to buy with a target price of Rs 442 per share. It feels that volumes push and government’s sharp focus on doubling CIL’s production by FY20 will bring cheer to the stock. Edelweiss also says that saving from low diesel prices to aid margin expansion as every Rs 1/litre drop in fuel cost saves Rs 100 crore for Coal India. Nomura has a buy rating with a target of Rs 443 per share. "As has historically been the case, we believe Coal India may well consider declaring an interim dividend next month. As investors who buy stocks in the upcoming OFS would be allocated shares on February 2/3, prospects of an imminent interim dividend may well act as a sweetener,” Nomura says. However, JP Morgan is underweight on the stock with a price target of Rs 325 per share as given the stake sale there is less room for a repeat of last year’s dividend. “There is no explicit dividend policy in place and hence predicting dividend is difficult. However, the combination of a stake sale and potentially lower dividends should result in the stock being under pressure,” it says in a note. At 09:28 hrs Coal India was quoting at Rs 363.60, down Rs 11.55, or 3.08 percent on the BSE.
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