FinMin floats Cabinet note for Coal India disinvestment
The Finance Ministry has floated a draft Cabinet note for 10 percent stake sale in Coal India through the Offer For Sale (OFS) route, which could fetch around Rs 20,000 crore to the exchequer.
New Delhi: The Finance Ministry has floated a draft Cabinet note for 10 percent stake sale in Coal India through the Offer For Sale (OFS) route, which could fetch around Rs 20,000 crore to the exchequer.
An inter-ministerial panel had last month cleared the 10 percent stake sale in Coal India (CIL). At present, the government holds 90 percent in the coal major.
"The DoD has floated Cabinet note for 10 percent OFS in CIL. We expect to get comments from ministries by early next month," an official source said.
Earlier, the department of disinvestment (DoD) was planning to ask CIL to go for part buyback of the government equity.
However, sources said the company has made investments in its subsidiaries from the cash balance and hence cannot go for a buyback.
Shares of CIL closed at Rs 301, up 0.65 percent over previous close on the BSE on Friday. At this price, the company is valued at Rs 1,90,122 crore.
The CIL trade union, however, has been opposing the disinvestment of the coal major. Finance Minister P Chidambaram had last week said the Coal Ministry would talk to the union to sort out the issues.
Coal India, which has a cash balance of about Rs 60,000 crore, will be the single largest disinvestment for the government in the 2013-14 fiscal.
The government plans to raise Rs 40,000 crore by way of PSU stake sale this fiscal. Market regulator SEBI had introduced OFS, which allows companies to sell shares in a simplified process on the stock market platform through a one-day bidding.
To meet the target, the disinvestment department has already identified a host of PSUs for selling minority stake. These include Indian Oil Corporation, Hindustan Aeronautics, Bhel and Neyveli Lignite.