NEW DELHI: Even as trade unions of India’s largest coal mining behemoth Coal India Limited threaten to strike work, the Government has decided to go ahead with its 10 per cent stake sale plan in CIL at a floor price of Rs 358 per share. The government hopes to garner Rs 22,600 crore from selling its stake in the public sector.
In the one-day stake sale, to be conducted on Friday during market hours from 9 am to 3.30 pm, the government will sell 31.58 crore shares or 5 per cent stake with an option to offload a further 5 per cent stake depending on the demand.
The floor price has been fixed at a discount of about 5 per cent from the current market price of CIL, where the government presently holds nearly 90 per cent stake.
Coal India shares slipped 2.3 per cent to close at Rs 375.15 on the BSE on Thursday.
At the floor price, the total 10 per cent stake sale can fetch the government Rs 22,600 crore. Retail investors would get a five per cent price discount and 20 per cent shares worth over Rs 4,000 crore would be reserved for them.
This would exceed the existing record amount of over Rs 15,000 crore raised through a public offer, which was also by CIL when it had entered the market with its IPO in 2010. CIL shares were sold at a price of Rs 245 in the IPO, which was oversubscribed by more than 15 times.
The government will have to dilute its stake by further 5 per cent at a later stage to meet the capital market norms of maximum 75 per cent promoter shareholding in a listed company.
Friday’s share sale would also help the government to cover significant ground as it intends to shore up Rs 43,425 crore through divestment in profit-making PSUs this fiscal. So far, the Government has been able to raise less than Rs 1,800 crore.
Opposing the move, trade unions said they will hold “symbolic demonstration” on Friday to protest against the disinvestment and also warned of a possible strike at a later stage after discussing the matter among all central unions.