Coal India lifeline in deficit deadline

In the biggest share sale ever in the country, the government plans to sell up to 10 per cent of its stake in mining behemoth Coal India Limited (CIL) through an offer for sale (OFS) on Friday, which is expected to raise around Rs 24,257 crore at current market price, to help curtail the fiscal deficit.

"The sale shall commence on January 30 and close on the same date at 3.30 pm," CIL said in a stock exchange filing.

The offer will have a 20 per cent reservation for retail investors.

The floor price for the stake sale will be announced on Thursday after market close.

Shares of CIL closed at Rs 384.05, up 0.27 per cent over the previous close, on the Bombay Stock Exchange.

According to a circular issued by the stock exchanges, the government will sell five-per cent stake, or over 31.58 crore shares, through the OFS route with anoption to sell an additional five per cent.

The government owns close to 90 per cent of CIL, which contributes to 80 per cent of the country's coal output.

The government has doubled to 20 per cent the quota reserved for retail investors, who can buy shares worth up to Rs 2 lakh.

They would also be given five-per cent discount to the bid price entered by them.

CIL would be second company to hit the markets under the government's disinvestment programme.

A minimum of 25 per cent of the CIL issue would be reserved for mutual funds and insurance companies.

"The government is also banking on Oil and Natural Gas Corporation (ONGC) to meet the divestment target this fiscal.
The government will sell a stake in ONGC even though falling global oil prices pose a challenge", oil minister Dharmendra Pradhan said on the sidelines of the India Energy Congress in New Delhi on Wednesday.

The government had planned to sell five per cent of its stake in ONGC to raise Rs 17,000-Rs 18,000 crore.

But the impact of tumbling global oil prices and the rising subsidy burden has battered the ONGC stock.

At current price, the government will get about Rs 15,000 crore.

"We will factor in market conditions before disinvestment," Pradhan said.

The government has lined up four other state firms-Indian Oil Corporation (10 per cent), Bharat Heavy Electricals (five per cent), National Aluminium (10 per cent) and Dredging Corporation (five per cent)-for disinvestment.