The government will sell up to 10 per cent stake in Maharatna public sector undertaking Coal India Ltd (CIL), which will help mop up around Rs24,000 crore at current market prices, as it revives an asset sale programme that would help lower the government's fiscal deficit by end-March.
The sale will be conducted through an auction on the stock exchanges on Friday (30 January) and the 10 per cent stake is expected to fetch the government around Rs24,240 crore ($4 billion) at today's closing price of Rs383.80 per share.
The minimum price for the offer will be announced tomorrow.
Coal India will offer for sale 31,58,18,220 equity shares of face value of Rs10 each with an option to sell an additional up to 31,58,18,220 equity shares aggregating to 10 per cent of the total paid-up equity share capital of the company, CIL said in a stock exchange filing.
The sale, which will be conducted through a separate window provided by BSE & NSE for this purpose, will commence at 9:15 am on 30 January and close on the same date at 3:30 PM (IST), it added.
One-fifth (or 20 per cent) of shares on offer has been reserved for retail investors, who will get a 5 per cent discount to the bid price. A retail investor means an individual who places bids for shares of total value not more than Rs2 lakh.
The government owns 89.65 per cent in CIL and a 10 per cent sale will bring its stake in the coalminer to 79.65 per cent.
With only two months left in the fiscal year, the government is desperately trying to utilise the current market sentiment to raise additional resources and complete the divestment target of Rs58,425 crore.
The government has raised Rs1,771 crore so far this fiscal by selling part of its stake in Steel Authority of India Ltd (SAIL). PSU divestment is key to achieving the government's budget promise of narrowing the fiscal deficit to 4.1 per cent of GDP in the current fiscal year.
Bank of America Corp, Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc, JM Financial Ltd, Kotak Mahindra Bank Ltd and SBI Capital Markets Ltd are managers to the share sale, according to the filing.