The proposed public issue of Coal India Limited (CIL) has reached the regulatory corridors, with the Securities and Exchange Board of India (SEBI) suggesting that the allotment of shares and stock options to employees of CIL can be done prior to the proposed public issue.
SEBI’s October 1 suggestion is in response to a letter written by CIL where it sought clarifications regarding allotment of shares to the employees and those whose lands have been acquired by CIL for mining purposes.
“The company can allot stock options to its employees prior to the proposed public issue of the company," SEBI said, adding that these shares would be exempt from lock-in norms.
It said the company can also allot shares to its employees on a preferential basis, but subject to lock-in requirements.
The regulator said its rules provide for reservation of securities to employees and the shares can be up to 10 per cent of the issue size.
On the allotment of shares to land-holders displaced by mining, SEBI clarified that its rules do not provide for specific reservation of securities to them, but the company can allot securities to the displaced before the proposed issue.