The government is planning to dilute its stake further in Maharatna public sector Coal India Ltd (CIL) with the company putting up on the stock exchanges a notice for an offer for sale of up to 10 per cent of the government stake in CIL.
The offer opens on January 30 with a five per cent sale that can go up to 10 per cent CIL said. The offer will have 20 per cent reservation for retail investors. The share sale shall commence at 9.15 a.m. on January 30 and close at 3.30 p.m.
At Wednesday’s closing price of Rs.384.05, a 10 per cent stake sale in the world’s largest coal producer will raise Rs.24,257 crore.
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While CIL had gone public in October 2010 with a 10 per cent dilution of the government holding, the trade unions had blocked a follow-on offer proposed by the UPA-II government in late 2013. With the Lok Sabha election round the corner then, the government had decided against pushing through its proposal.
In this fresh move, the allocation shall be on a price priority method at multiple clearing prices in accordance with the SEBI OFS circular. The floor price would be determined by January 29. The government has appointed seven brokers to the issue.
CIL had helped generate over Rs 23,000 crore through its initial public offer and expectations are that a similar amount would be garnered this time too. CIL shares have averaged at Rs.383.
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It remains to be seen how the trade unions (TUs) counter this fresh divestment proposal. They had been up in arms against the Coal Ordinance. All the central trade unions had united to put up a joint resistance to what they described as government moves to denationalise the Indian coal sector. However, their five day strike-plan tapered off on January 7 with the government announcing the constitution of a committee headed by a joint secretary to look into all the demands of the TUs.
“That Committee is yet to be constituted. We feel deceived,” senior INTUC leader S Q Zama told The Hindu . He said that confabulations have begun among the TU leadership to work out a game plan.
The allocation shall be on a price priority method at multiple clearing prices.