Even as it firms up its plan to make an initial public offer (IPO) before the end of 2010, Navratna public sector unit Coal India Ltd (CIL) may appoint a consultant through the nomination route instead of engaging an independent financial adviser (IFA) through competitive bidding.
A source said that this had become necessary as it was felt that the work of the IFA would overlap with that of a merchant banker.
The IFA’s mandate was to assist and advise CIL in the strategy, preparation and implementation of the proposed IPO, besides equity valuation. The IFA that CIL had sought to appoint was needed to be a financial advisory firm which is registered as a Category-I merchant banker under the Securities and Exchange Board of India (SEBI) regulations and having experience of IPO and IPO-linked deals.
Incidentally CIL had already issued advertisements inviting expressions of interest for selection of the IFA for listing of the equity held by the Government in the company on the stock exchanges.
The current thinking is in favour of appointing by the nomination route, a consultant who has had experience in handling such matters. Among the names doing the rounds is that of a faculty member of one of the premier management institutes.
CIL, which has set a tentative timeline of November 2010 for its listing, has said that the purpose of the IPO was to list on the National and the Mumbai stock exchanges.
The listing is also expected to position it as a world-class coal mining company, being valued in line with its peers.
CIL accounts for 85 per cent of the country’s coal production which helps it meet 46 per cent of the country’s commercial energy needs. It is at present engaged in talks with overseas mining majors for striking alliances to improve the availability of coal in the country at negotiated prices.