The Indian government has announced plans to sell up to a 3% stake in Coal India Ltd through an offer for sale (OFS) route, with the disinvestment expected to generate at least ₹4,158 crore for the exchequer. This move marks the first stake sale in a public sector undertaking by the government in the current financial year.
The floor price for the two-day OFS has been set at ₹225 per share. Non-retail investors were able to participate in the OFS starting on Thursday, while retail investors were given the opportunity to bid on Friday. The government plans to divest 3% equity in Coal India, including a Green Shoe option of 1.5%.
In a stock exchange filing, Coal India revealed that the government intends to offload 9.24 crore shares, equivalent to a 1.5% stake in the company, at a floor price of ₹225 per share. Additionally, there will be a green shoe option to sell an equal amount of stake in case of oversubscription.
With the floor price set at a 6.7% discount to the closing price of Coal India shares on the BSE on Wednesday, the stake sale is expected to generate approximately ₹4,158 crore. The share price of Coal India closed at ₹241.20, experiencing a 1.29% decline from the previous close on the BSE.
Currently, the government holds a 66.13% stake in Coal India. The disinvestment of shares in the company is part of the government’s broader strategy to meet its disinvestment target of ₹51,000 crore for the current fiscal year.
The stake sale in Coal India will provide an opportunity for investors to acquire shares in one of India’s largest coal mining companies. It also aligns with the government’s efforts to promote divestment and unlock the value of public sector assets. The proceeds from the disinvestment will contribute to the government’s revenue and can be utilized for various developmental and welfare initiatives.
The stake sale in Coal India demonstrates the government’s commitment to strategic divestment and fiscal consolidation. It sets the stage for further disinvestments in other public sector undertakings, as the government aims to raise funds, attract private investment, and stimulate economic growth in India.
