Cabinet panel clears equity sale in Coal India, Hindustan Copper
15 Jun 2010
The Cabinet Committee on Economic Affairs (CCEA) today approved the divestment of 10 per cent paid-up equity of Coal India Limited (CIL) and 20 per cent of Hindustan Copper Limited (HCL).
The stake sales in the two state-run firms is expected to rake in around Rs16,000 crore for the government. The government has targeted Rs40,000 crore in revenue from sale of stakes in public sector companies in the current financial year.
In the case of Hindustan Copper Ltd, the divestment of 10 per cent government equity will be followed by a fresh issue of equity of equal size by the company in the domestic market.
The equity sale in CIL will follow the book building process in the domestic market. One per cent of the equity will be offered to employees of CIL and its eight subsidiaries. Such employee investors will also get a 5 per cent price concession.
"Disinvestment of CIL would be through book-building process in the domestic market. One per cent of the equity will be offered to the employees of CIL and its eight subsidiaries," home minister P Chidambaram said after the CCEA meeting.
To ensure wider public participation in the divestment process, the CCEA has granted 5 per cent price concession to retail investors as well.