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The Centre has offered a 3 per cent stake in Coal India, targeting to mop up nearly ₹4,953.51 crore through auction method under offer-for-sale via stock exchanges.
The floor price for the offer-for-sale — which opens on Wednesday — is ₹266 a share of ₹10 each. Under this offering, the Centre is looking to offload atleast 18,62,22,275 shares. Besides, there is a greenshoe option of an additional 6 per cent that could be sold if there is strong demand from various investor categories, according to the regulatory filing by CIL with the stock exchanges on Tuesday.
As of September 30, the Centre held 78.32 per cent stake in CIL. The upcoming offer-for-sale is expected to help CIL achieve the minimum public shareholding norm stipulated by the capital market regulator SEBI.
Retail investors will be allocated shares at a discount of 5 per cent to the cut-off price, the CIL statement added. Employees of the company will be offered a discount up to 5 per cent (to the cut-off price in the retail category of the offer) subsequent to completion of the offer.
Shares of Coal India closed 3.88 per cent lower at ₹275.90 a scrip during intraday trade on Tuesday.
“Twenty per cent of the offer size shall be reserved for retail investors, subject to receipt of valid bids…No single bidder other than mutual funds and insurance companies shall be allocated more than 25 per cent of the offer shares,” a Coal India statement said.
The offer will take place on a separate window of the stock exchanges on October 31, 2018 and November 1, 2018 from 9:15 AM to 3:30 PM. Non-retail investors can place their bids only on October 31, 2018 (T-day). While placing their bids, the non-retail investors may indicate their willingness to carry forward their unallotted bids to the next day (T+1) for allocation to them in the unsubscribed portion of the retail category.
Under the greenshoe option, Coal India said, there will be an option to sell 37,24,44,550 or 6 per cent equity shares of the company through the oversubscription option. Collectively these shares represent 9 per cent of the total paid-up equity share capital of the company as on October 30.
The provision to earmark more shares under the oversubscription option is being viewed as an expectation that there will be heavy buying from retail investors considering the strong fundamentals of the company.
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