Government Gets Ready To Offload About 3% Stake In Coal India

May 31, 2023 Pragna Chakraborty Business, India 0

The Union government intends to sell up to 3% of its interest in state-owned Coal India through an offer for sale (OFS) on June 1.

The Sale

Through the OFS, the government will sell 9.24 crore shares or around 1.5% of the total, and in the event of oversubscription, an extra 1.5% of the total will be up for sale.

To encourage a stock market boom and increase income in the last quarter of the fiscal year, the Indian government planned to sell 5 to 10 percent of its holdings in Coal India, Hindustan Zinc, and Rashtriya Chemicals and Fertilisers (RCF) in November of last year. The lower end of the spectrum could now get the Centre roughly $2 billion or Rs. 16,500 crores at current prices.

On June 1-2, the offer for sale will be made through a separate window on the stock markets.

Retail investors can participate in the OFS on June 2 (T+1), but non-retail investors can put their bids on June 1, which is the T day.

The non-retail investors may express the desire to have their new bids allocated to them in the retail category’s unsubscribed portion on T+1 day. The offer’s floor price is set at Rs 225, which is less than 7% of the most recent traded price.

About Coal India

The Government of India’s Ministry of Coal owns the central public sector enterprise known as Coal India Limited (CIL). Its main office is in Kolkata. It is the world’s biggest government-owned coal producer.

As per Business Standard, Tuesday saw the first significant coal price rise from CIL since 2018, with an 8% increase across high grades G2 to G11. This comes after the business announced a pay rise in January.

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