Govt's 3% share sale in Coal India to fetch Rs5,000 crore

The sale of a three per cent stake in Coal India Ltd (CIL) is sure to fetch Rs5,000 crore for the government with the retail portion getting subscribed by 1.07 per cent on the second day of the offer for sale.

With the share sale meeting more than the targeted 186.2 million shares or 3 per cent in Coal India Ltd (CIL) at a floor price of Rs266 apiece, the government is likely to opt for selling an additional 6 per cent through the OFS.
Bidding opened for retail buyers on the second day of the two-day OFS today, during which small investors put in bids for over 42.3 million shares or 1.07 times the shares reserved for them, as per data available with NSE. As much as 39.6 million shares are reserved for retail investors.
On Wednesday, the first day of the OFS, institutional investors had put in bids for 158.4 million shares worth Rs4,300 crore against the 148.9 million shares on offer, ie, 1.06 times the shares reserved for them.
The government is selling over 186.2 million shares or 3 per cent in Coal India Ltd (CIL) at a floor price of Rs266 apiece. This will fetch the government Rs5,000 crore.
On top of the 3 per cent stake sale, the government also has an option to retain an over-subscription of another 6 per cent stake in the CIL OFS.
If the additional 6 per cent stake or 372.4 million shares are put on the block, then the government could further get about Rs10,000 crore, taking the stake sale to 9 per cent, which could fetch as much as Rs15,000 crore to the government.
The data on how much Green Shoe option (additional bids) in CIL OFS will be exercised by the government will be available later in the day.
Coal India (CIL) offer for sale (OFS) is the first big ticket disinvestment of the current fiscal. The government currently holds 78.32 per cent stake in Coal India.
The government has already raised over Rs10,028 crore through PSU stake sale, including through follow-on offer of Bharat-22 ETF, and initial public offer of four PSUs - RITES, IRCON, Mishra Dhatu Nigam Ltd (MIDHANI) and Garden Reach Shipbuilders.
The government has set a target to divest stake worth Rs80,000 crore in state-run units in the current fiscal.
The government had last sold 10 per cent stake in CIL through an OFS in January 2015. It had then mopped up about Rs23,000 crore.
Shares of Coal India were trading at Rs 263.30, down 1.07 per cent over previous close on the BSE.