The tentative timeline of the initial public offer (IPO) of Coal India Ltd., (CIL) has been set for August, subject to the approval of the Cabinet, following meetings with the Chairman of the Securities and Exchange Board of India (SEBI), the market regulator on Friday.
During the meeting, it was also decided that a special dispensation would be sought to offer shares to the employees of CIL and its subsidiaries. Initially, around 11 per cent divestment is proposed which is likely to be followed with an offering for people who give their land for coal projects. The filing of draft prospectus is now likely to happen by June and 10 per cent would be offered to the public.
The road map that was discussed on Friday flagged as the first task a letter which is to be written to the SEBI through the Department of Divestment (DoD) wherein the special dispensation would be sought for offering shares to the employees of CIL and its subsidiaries.
Once this response is received, the Cabinet note on this is to be prepared by the DoD, after which necessary actions such as the appointment of a lead manager and the preparation of a draft prospectus is proposed to be initiated, according to sources.
When contacted for his comments, CIL Chairman P. S. Bhattacharyya admitted that August 2010 is indeed a stiff target for hitting the market.While SEBI rules do not permit offering shares to subsidiaries of holding companies, it was decided to try overcoming the problem by seeking the special permission. This solution emerged after the structure of CIL and its subsidiaries were explained to SEBI officials.Indications were that all efforts at CIL would now be geared to adopt its 2009-10 accounts as early as possible after getting the necessary approvals from the CAG and the statutory auditors.
“The target is to complete this process by May 31,” sources said.
