In the biggest-ever share sale of a public sector unit (PSU), the government will offer Coal India Ltd (CIL) shares at a floor price of Rs. 358 a piece on Friday, even as trade unions warned of strike against the move.
The government is looking to sell 315.8 million shares, or 5% stake in CIL through a public offer, with an option to sell another 5% through offer for sale (OFS) or auction route. The move is likely to generate over Rs. 22,600 crore.
CIL has reserved 20% shares for retail investors who will also get a 5% price discount.
The floor price or minimum selling price is nearly 5% below Thursday’s closing price of Rs. 375.15 a share.
The Centre is banking on stake sale in PSUs to help meet its fiscal deficit target of 4.1% of GDP for 2014-15. The CIL share sale could help make up for more than half of the disinvestment target of Rs. 43,425 crore for current fiscal.
The floor price for the sale in terms of the Sebi OFS circular shall be Rs. 358 per equity share, CIL said in a BSE filing.
The Centre currently holds 89.65% in CIL, which was listed through a record initial public offering (IPO) in October 2010, raising Rs. 15,199 crore. At the IPO price of Rs. 245 apiece, the issue was oversubscribed 15 times.
The government has raised Rs. 1,715 crore from the sale of 5% stake in SAIL in 2014-15.
According to a PTI report, stock exchanges have sought clarification from CIL on reports that unions have threaten to “go slow”.
Sebi and exchanges including the BSE and the NSE have put their surveillance systems on “high alert” to thwart manipulative activities in CIL shares in wake of the divestment programme.