India’s largest coal producer, Coal India Ltd has planned an Initial public offering in which it will reserve about 1% for the its employees. This is down from an earlier announcement in which the chief of the company had said that it will reserve about 2% for the employees.

The chairman of the company, Partha S. Bhattacharyya said on Tuesday that the reserved shares will be offered through the Employees Stock Purchase Scheme.

Mr. Bhattacharyya said, "We won't be offering two percent of the shares to our employees, in all probability it would be one percent and it won't be reserved but issued to them through a stock purchase scheme."

He also said that the shares could not be reserved for the employees because the Securities and Exchange Board of India had not allowed issuing shares to the employees in the subsidiaries of the company.

Coal India Ltd has eight subsidiaries which employs most of its staff. These subsidiaries also own the coal mines. The company is preparing the scheme through which it will be allowed to issue the shares to its employees and is expected finalize it on Feb 19.

The government currently holds 100% of the stake in company out of which it will sell 10 percent through the initial public offering. The ministry concerned has said that the divestment could range between 10 to 15 per cent.

Meanwhile, Mr. Bhattacharyya has said that the company is unlike to meet its production target of 435 million tonne for the current financial year mainly due to delays in getting approvals.

He further said that the company plans to produce 460 million tonne of coal in 2010-11. He outlined that the company units are facing difficulties due to shortages of rakes for transportation. The requirements were of 210 rakes per day but it gets around 165-170 rakes.

"Some 17 projects had been stalled which were supposed to produce 101 million tonnes at the terminal year of the 11th Plan period i. e. 2012," he added.

The company plans to import about 1.5 million tonnes of coal for the Damodar Valley Corporation and Nalco and it plans to enter the organized coal mining sector in Meghalaya for which it has also submitted draft of new mining rules which are being discussed by the authorities.