JOIN US10% of Coal India to go under hammer
In a decision that is expected to shore up revenues to meet last year’s Budget target, the government on Friday decided to sell up to 10 per cent stake in Coal India (CIL) to fetch over Rs 24,000 crore to the exchequer. The government owns close to 90 per cent in the largest coal producer is the world.
The decision to restart stake sale once again just ahead of the Budget is crucial after Prime Minister Narendra Modi made an announcement two days ago in the presence of US President Barack Obama that India will meet its fiscal deficit target, a number closely looked at by investor countries and global credit rating agencies. The government also announced that it will go for a 5 per cent share sale in energy explorer ONGC to raise Rs 18,000 crore, Oil Minister Dharmendra Pradhan said. With just two months to go before the end of the current fiscal, the Centre has barely managed to garner Rs 1,751 crore through disinvestment and is looking at aggressively selling stakes in public sector firms to help meet its fiscal deficit target of 4.1 per cent of the GDP for the year ending March 31, 2015.
CIL shares will be sold through an auction on stock exchanges, the government said in a statement on Wednesday.
The government has reserved 20 per cent quota for retail investors. They can buy shares worth up to Rs 2 lakh. They will also be given a 5 per cent discount to the bid price entered by them. If the two share sales proceed as planned, the government will be able to reach quite close to the budgetary target of Rs 43,425 crore from the divestment proceeds.
The government has also lined up a host of other companies, including NMDC, Indian Oil Corporation (IOC), Bharat Heavy Electricals (BHEL), National Aluminium (Nalco) and Dredging Corporation (DCIL) for the stake sale, but it is not clear whether they will go under the hammer this year. Also on cards are 5 per cent stake sales in PFC and REC.