The government will sell 10% stake, or 631.7 million shares, in Coal India Ltd (CIL) through an offer for sale (OFS) on Friday, which is likely to generate more than Rs. 24,000 crore at an estimated price of Rs. 375-385 per share.
Besides the OFS, it will also have an option for an additional 5% stake sale.
Markets regulator, the Securities and Exchange Board of India (Sebi) and stock exchanges have put their surveillance systems on “high alert” for the mega share sale. “All systems are on high alert to thwart any manipulative activities in the market,” a source said.
The Centre had raised Rs. 1,700 crore through a 5% stake sale in SAIL in December.
CIL would be second company to hit the markets under the government’s disinvestment programme, through which it hopes to raise Rs. 43,425 crore in 2014-2015.
Coal unions have, however, strongly opposed the government’s move and have threatened to hold protests. Union leaders of Bharatiya Mazdoor Sangh and Centre for Indian Trade union (CITU) told HT that a joint strategy would be made to oppose the disinvestment.
“We will oppose and hold demonstrations to highlight the dangers of divestment in Coal India,” said Jibon Roy, leader of All India Coal Workers Federation, affiliated to CITU.
“The (CIL share) sale shall commence on January 30 and close on the same date at 3.30 pm,” CIL said in a filing to the Bombay Stock Exchange (BSE). The offer will have 20% reservation for retail investors. The floor price would be announced on Thursday after the close of market hours.
CIL shares closed up 0.3% to Rs. 384.05 on the BSE on Tuesday.
The lead brokers for the sale include DSP Merrill Lynch ltd, Credit Suisse securities (India) Pvt Ltd, Deutsche Equities india pvt ltd, Goldman Sach (India) Securities Pvt Ltd, JM Financial Institutional Securities Pvt Ltd, Kotak securities ltd and SBI CAP Securities Ltd.
Finance minister Arun Jaitley, in the budget in July, had pegged the disinvestment target at Rs. 58,425 crore for 2014-15.