India’s Union Cabinet has approved sale of the additional 10% stake in the state-run Coal India for about $3bn.
About 63,16,36,440 shares will be sold from the state run unit at a face value of Rs10 each out of the Government of India’s 78.65% stake.
The sale is a part of the government’s effort to raise Rs695bn ($10bn) this fiscal year through March by offloading minority stakes in its state-run companies.
As part of this effort, the country has raised Rs127bn ($2bn) so far by selling shares in companies including Rural Electrification, Power Finance Corporation of India, Indian Oil and Dredging Corporation of India, reported The Wall Street Journal.
Bids have already been placed by bankers HSBC, ICICI Securities, SBI Capital, Axis Capital, Elara Capital, Edelweiss, Kotak Investment Banking and JM Financial, for managing the stake sale in Coal India, Economic Times reported citing recent reports.
Indian Coal Minister Piyush Goyal told reporters that the timing of the sale of the stake in Coal India, which contributes around 82% of the coal production in the country, will be decided by the Indian Finance Ministry.
In January 2015, the government sold 10% stake in Coal India for more than Rs250bn ($3.7bn) following initial 10% stake sale in the company for Rs150bn ($2.26bn) through initial public offering (IPO) in 2010.
Foreign institutional investors own 9.04% stake, domestic institutions own 8.45% stake and non-institutions 2.86% in the state-controlled coal mining company.
However, the divestment decision is being opposed by the company’s employee union, reported Press Trust of India.
Image: India plans to raise $10bn this fiscal year through March. Photo: courtesy of franky242/ FreeDigitalPhotos.net.