India's largest share sale, the initial public offer of Coal India Ltd. (CIL), opened on Monday amid a fair response from the markets with CIL Chairman P. S. Bhattacharyya expressing his disappointment at the level of employee-participation to the issue. He said that the employee response was partly influenced by the trade unions.
“We are not happy … employee participation to the issue was highly desirable”, he said in reply to a query in this regard at a pressmeet here. Two of the major trade unions observed a day's strike today (Monday) with two others not participating in the strike but extending their support to it.
There were conflicting reports on the strike impact with the Bharatiya Mazdoor Sangh saying that production had been affected in all the areas, including those where it was not the majority trade union, and the Centre of Indian Trade Unions (CITU) saying that the strike had been less than partial. CIL said that the strike has had marginal impact.
Pointing out that the company “had taken extraordinary measures to make it possible for the four-lakh employees working in the eight subsidiaries of CIL to subscribe to the issue,”
Mr. Bhattacharyya said that the market regulator had relaxed its rules to make this possible.
The shares which have been put on the block in a price band of Rs.225-245 a piece will be available at a five per cent discount to eligible employees and retail investors. “Certainly it will fall short” was Mr. Bhattacharyya's sharp response to a query on the one per cent quota reserved for employees.
The chairman and key officials of CIL, the Divestment Department and the Coal Ministry are barred from participating in the issue for the sake of transparency and to rule out any insider trading.
An official of an investment bank managing the issue said that the shortfall would be offered to other bidders in the stipulated ratio. Divestment Secretary Sumit Bose said that one would have to wait till October 21, when the issue closes, for a clearer picture.
Earlier during his presentation, Mr. Bhattacharyya said that CIL's realisations would improve once it ramped up its coal beneficiation programme.
By 2017, he said that 40 per cent of all thermal coal produced by CIL would be washed.
Offer for sale
The share sale, which is expected to garner between Rs.13,000 and Rs.15,500 crore marks CIL's entry into the capital market with a public offer of 63.16 crore shares of Rs.10 each. The issue closes on October 20 for qualified institutional bidders and on October 21, for retail and non-institutional bidders.
CITU leader Jibon Roy, General Secretary of the All India Coal Workers Federation said that agitation programmes would be held throughout the issue period. He also said that the fact that most employees had not opened the requisite dmat account showed that they were opposed to the share-sale.