CIL down 4% as floor price for stake sale set at a discount

Stocks of Coal India ended nearly 4 percent lower in the wake of the floor, or the minimum offer, price for the company's share sale being set at a discount.

Mumbai: Stocks of Coal India ended nearly 4 percent lower in the wake of the floor, or the minimum offer, price for the company's share sale being set at a discount.

CIL's scrip lost 4 percent to Rs 360.10 in intra-day trade at the BSE and finally ended at Rs 360.85, down 3.81 percent from its previous close.

On the NSE, it fell by 3.68 percent to settle at Rs 361.15.

In the biggest ever disinvestment exercise, the government's 10 percent stake sale in Coal India on Friday got over subscribed by 1.05 times and fetched about Rs 22,600 crore although retail investors did not bid so aggressively.

The floor price for CIL's share sale has been set at Rs 358 apiece, which is 4.57 percent less than yesterday's closing price.

This is the biggest ever share sale by any private or public sector company in India and exceeds the previous record of over Rs 15,000 crore made by CIL itself in 2010.

However, the retail demand seemed lacklustre as 12.63 crore shares reserved for these investors could get bids for less than half the size (5.37 crore).

The total issue of 63.16 crore shares got bids for 66.20 crore shares, generating demand worth nearly Rs 24,000 crore on offer, as per stock exchanges data. The issue got over-subscribed before the close of market hours.

The government had offered to sell 31.58 crore shares, or five percent stake, in CIL through a public offer, with an option to sell another 5 percent.

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