Coal India disinvestment likely after 1 April
19 March 2014
The ministry of finance is looking to sell a stake in Coal India Ltd (CIL) in the next financial year beginning 1 April to help the government meet its disinvestment target of Rs36,925 crore.
"We are looking at divesting stake in Coal India next fiscal," PTI reported an official as saying, without specifying the extent of stake dilution.
A planned stake sale in Coal India in the current financial year had to be deferred after stiff opposition from the trade unions. The coal major had to make up for that by paying about Rs19,000 crore as dividend to the exchequer.
The government, which holds a 90 per cent stake in CIL, initially sought to divest 10 per cent, stake but lowered it to 5 per cent or 31.58 crore shares, on account of opposition from the unions.
At today's closing share price of Rs270.40, a 5 per cent stake sale in CIL would fetch the government more than Rs8,500 crore.
In the interim budget 2014-15 presented in parliament on 17 February, the government estimated Rs36,925 crore income from public sector unit (PSU) disinvestment.
Receipts from dividend and disinvestment are essential for the government to rein in the fiscal deficit, which is targeted at 4.6 per cent of GDP this financial year.
For the current fiscal, the government scaled down the disinvestment target to Rs16,027 crore from Rs40,000 crore originally envisaged.