MUMBAI, Jan 14 (Reuters) - State-run Coal India Ltd said on Tuesday it will pay an interim dividend of 29 rupees a share, or 183.2 billion rupees ($2.98 billion), in the current fiscal year that ends on March 31, in a move that will help the cash-starved federal government narrow its fiscal deficit.
The government’s 90 percent shareholding in the company will fetch it about $2.7 billion.
The Kolkata-based company, the world’s largest coal miner by output, had paid a total dividend of 14 rupees a share in the previous fiscal year.
India’s slowing economy and rising subsidies on food and fuels have pushed the government into a corner, with fiscal deficit for the April-November period rising to $82.3 billion, or nearly 94 percent of the full-year target.
New Delhi aimed to control its budget deficit in part by raising $6.4 billion through stake sales in state companies, but disagreements among ministries and a depreciation in the rupee have complicated the timing of several issues.
So far this fiscal year, the government has raised about $500 million through this route.
Delayed issues include plans to sell 5 percent of Coal India and 10 percent of Indian Oil Corp Ltd, that would have totally earned it up to $2.3 billion.
Coal India, which accounts for 80 percent of India’s coal output, has missed production targets for several years and its growth hobbled by a lack of investments on modernisation and delayed approvals of its mining projects.
The state firm held cash reserves of 642.7 billion rupees at September-end, the second among Indian corporates after energy major Reliance Industries. ($1 = 61.58 rupees) (Reporting by Prashant Mehra; Editing by Sunil Nair)