The government today fixed the floor price for sale of shares in Coal India Ltd (CIL) at Rs358 a share, which could fetch as much as Rs22,612 crore for the exchequer and help the government near its fiscal deficit target for the current financial year.
The floor price or minimum selling price is nearly 5-per cent below today's closing price of the CIL of Rs375.15 a share.
The sale will commence at 9:15 am on 30 January and close on the same date at 3:30 PM (IST).
Coal India is offering to sell 31,58,18,220 equity shares of face value Rs10 each with an option to sell an additional 31,58,18,220 equity shares aggregating to 10 per cent of the total paid-up equity capital of the company, CIL said in a stock exchange filing.
CIL has reserved 20 per cent of the shares on offer for retail investors who will also get 5 per cent price discount. A retail investor means an individual who places bids for shares of total value not more than Rs2 lakh.
The sale will be conducted through offer for sale (OFS) or auction route through a separate window provided by BSE & NSE for this purpose.
The government owns 89.65 per cent in CIL and a 10 per cent sale will bring its stake in the coalminer down 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.