Govt to sell 3% stake in Coal India, floor price at Rs 266 a share; disinvestment will fetch exchequer Rs 5,000 cr

New Delhi: The government will on Wednesday launch an OFS programme to sell 3 percent stake in PSU major Coal India at a floor price of Rs 266 a share, which is expected to fetch about Rs 5,000 crore to the exchequer.

Further, the government will have an option to retain an over-subscription of an additional 6 percent stake in the company, which will take the total stake on offer to 9 percent, Coal India Ltd (CIL) said in a NSE filing.

The two-day offer for sale (OFS) will open tomorrow for institutional bidders. Retail investors, who can bid for the OFS on Thursday, will get an additional 5 percent discount.

Representational image. Reuters.

Representational image. Reuters.

At the current market prices, sale of 3 percent stake or 18.62 crore shares would fetch the government around Rs 5,000 crore. If the additional 6 percent stake or 37.24 crore shares are put on the block, then the government could get a further about Rs 10,000 crore.

Taken together, the 9 percent stake sale in CIL could fetch about Rs 15,000 crore to the government.

The floor price of Rs 266 a share is at a discount of nearly 4 percent or Rs 11 a share over the closing price of CIL scrip on the NSE.

The government had last sold 10 percent stake in CIL through an OFS in January 2015. It had then mopped up about Rs 23,000 crore.

The government currently holds 78.32 percent stake in Coal India.

Shares of Coal India closed at Rs 277 apiece, down 3.62 percent on the NSE.

Coal India would be the first PSU OFS in the current fiscal. The government has already raised over Rs 10,028 crore through PSU stake sale, including by way of follow on offer of Bharat-22 ETF, and initial public offering of 4 PSUs -- RITES, IRCON, Mishra Dhatu Nigam Ltd (MIDHANI) and Garden Reach Shipbuilders.

The stake sale in Coal India would help the government move forward towards the Rs 80,000 crore disinvestment target in current fiscal.


Updated Date: Oct 30, 2018 18:51 PM

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