The government has decided to offer Coal India Limited (CIL) shares at a floor price of Rs 358 a piece today for offloading up to 10-per cent stake in the staterun behemoth, which would fetch an estimated Rs 22,600 crore.
The floor price was fixed on Thursday at a discount of about five per cent from the current market price of CIL, in which the government has close to 90-per cent stake.
In the one-day stake sale-from 9 am to 3.30 pm-the government will sell 31.58 crore shares, or five per cent stake, with an option to sell a further five per cent depending on the demand.
Retail investors would get five per cent price discount and 20-per cent shares worth more than Rs 4,000 crore would be reserved for them.
This would exceed the existing record amount of more than Rs 15,000 crore raised through a public offer which was also by CIL when it had entered the market with its IPO in 2010.
CIL shares were sold at a price of Rs 245 in the IPO, which was oversubscribed by more than 15 times.
The government will have to dilute its stake by further five per cent at a later stage to meet the capital market norms of maximum 75-per cent promoter shareholding in a listed company.
The share sale would also help the government on its disinvestment target of Rs 43,425 crore for the current financial year ending on March 31, out of which it has so far collected less than Rs 1,800 crore.
Opposing the move, trade unions said that they will hold symbolic demonstration tomorrow to protest against the disinvestment and also warned of a possible strike at a later stage after discussing the matter among all central unions.
Stock exchanges also sought clarification from the company on media reports that unions have threatened to 'go slow', to which CIL replied that it has not received any notice from any union in this regard.
CIL would be second company to hit the market under the disinvestment programme this fiscal, the first being Steel Authority of India Limited, in which shares worth about Rs 1,700 crore were sold. CIL alone can help the government meet more than half of the divestment target.
The government will need to sell shares worth further Rs 20,000 crore in public sector firms in about two months left in this fiscal to help meet its fiscal deficit target of 4.1 per cent of GDP for this financial year.