Coal India’s Rs22,600-cr stake sale more than fully subscribed

The Rs22,612.58 crore Coal India share sale was more than fully covered just five minutes before the issue closed for subscription, helping the government meet nearly half of the divestment target fixed for the current financial year. The offer for sale received orders for 66,20,45,720 shares against an inventory of 63,16,36,440 shares.

Of this, non-retail investors placed orders for 60,83,62,813 shares or 1.2 times the non-retail portion while retail investors subscribed for only 42.50 per cent or 5,36,82,907 shares of the 12,63,27,288 shares on offer.

Coal India has offered to sell 31,58,18,220 equity shares of face value Rs10 each with an option to sell an additional 31,58,18,220 equity shares aggregating to 10 per cent of the total paid-up equity capital of the company.

The sale of shares commenced at 9:15 am today and the issue closed for subscription at 3:30 pm.

The government had fixed the base price for non-retail portion at Rs358.48 per share, while the indicative price for retail investors was Rs360.65 per share. CIL has reserved 20 per cent of the shares on offer for retail investors who will also get 5 per cent price discount.

A retail investor means an individual who places bids for shares of total value not more than Rs2 lakh.

The government owns 89.65 per cent in CIL and a 10 per cent sale will bring its stake in the coalminer down to 79.65 per cent.

With only two months left in the fiscal year, the government is desperately trying to utilise the current market sentiment to raise additional resources and complete the divestment target of Rs58,425 crore.

The government has raised Rs1,771 crore so far this fiscal by selling part of its stake in Steel Authority of India Ltd (SAIL). PSU divestment is key to achieving the government's budget promise of narrowing the fiscal deficit to 4.1 per cent of GDP in the current fiscal year.

Bank of America Corp, Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc, JM Financial Ltd, Kotak Mahindra Bank Ltd and SBI Capital Markets Ltd managed the share sale.

Coal India scrip ended at Rs360.85, down 3.81 per cent on the Bombay Stock Exchange. On the NSE, the scrip fell 3.68 per cent to Rs. 361.15.