10% stake sale in Coal India gets approval

Our Bureau New Delhi | Updated on January 22, 2018 Published on November 18, 2015


Cochin Shipyard public issue also receives nod

With about four months left for the fiscal to end, the government seems to be betting on Coal India (CIL) in a big way to meet its disinvestment target for 2015-16.

The Cabinet on Wednesday gave its approval for a 10 per cent stake sale in CIL, pegged to be the largest for fiscal 2015-16.

Aims ₹21,000 crore

At Wednesday’s closing share price of ₹333.75 on the BSE for CIL, the stake sale could fetch the government a little over ₹21,000 crore. However, this would be less than the ₹22,557 crore mopped up by the government when it had sold 10 per cent stake in CIL last time in January 2015.

Stake sales are also planned in Container Corporation of India, Oil India, Hindustan Copper and NTPC.

Till now the government has raised ₹12,600 crore through disinvestments in four PSUs – Indian Oil Corporation, Dredging Corporation of India, Power Finance Corporation, and Rural Electrification Corporation.

Budget 2015-16 had set a target of ₹69,500 crore from disinvestments, including ₹28,500 crore from strategic stake sales and ₹41,000 crore from minority stake sales, such as is being planned in CIL. The target was reduced following volatility in the commodity markets, Jayant Sinha, Minister of State for Finance, had said on October 27.

Finance Minister Arun Jaitley will decide the timing of the stake sale in CIL, Piyush Goyal, Minister of State (Independent Charge) for Power, Coal and New & Renewable Energy, said after the Cabinet meeting on Wednesday.

In August, the Cabinet had asked the Department of Disinvestment to issue a request for proposal (RFP) calling merchant bankers for the stake sale. Since then, share prices of the State-led coal miner have fallen nearly 11 per cent on the BSE.

Cochin Shipyard IPO

Meanwhile, the Cabinet Committee on Economic Affairs also gave the nod to Cochin Shipyard (CSL) for an initial public offering (IPO) of shares.

The proposed share sale to the public would consist of 3.39 crore equity shares, comprising a fresh issue of 2.26 crore equity shares and sale of 1.13 crore equity shares of the government’s holding in Cochin Shipyard .

“The fresh shares are being issued by CSL to part-finance the expansion in the short and medium term,” an official statement said.

Published on November 18, 2015
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