Govt’s Coal India OFS opens for institutional buyers; scrip tanks 3 pc

New Delhi, Oct 31 (PTI) The Government’s three per cent stake sale in Coal India at a floor price of Rs 266 apiece opened for bidding by institutional investors Wednesday with a subscription of over 24 per cent shares on offer in initial hours of trade.

This is the first big ticket share sale and first offer for sale (OFS) of the government in current fiscal, which will fetch at least Rs 5,000 crore to the exchequer.

However, following a broader market trend, Coal India scrip slipped to Rs 266.95 apiece, down 3.24 per cent over previous close on the BSE.

The government is selling over 18.62 crore shares or 3 per cent in Coal India Ltd (CIL) at a floor price of Rs 266 apiece. Of this, 14.89 crore share are offered to institutional investors Wednesday.

The government also has an option to retain an over-subscription of another 6 per cent stake in the CIL OFS.

According to NSE data, subscription for over 3.64 crore shares or 24 per cent of the shares on offer came in by 11:25 am. Bidding will go on till end of trading hours.

Bidding by retail investors will open Thursday and a 5 per cent additional discount would be offered to these investors, who bid for shares worth not more than Rs 2 lakh.

At a floor price of Rs 266 apiece, sale of over 18.62 crore shares would fetch Rs 5,000 crore to the exchequer.

If the additional 6 per cent stake or 37.24 crore shares are put on the block, then the government could get a further about Rs 10,000 crore. Taken together, the 9 per cent stake sale in CIL could fetch about Rs 15,000 crore to the government.

The floor price of Rs 266 a share is at a discount of nearly 4 per cent or Rs 11 a share over Tuesday’s closing price of CIL scrip on the NSE.

The government had last sold 10 per cent stake in CIL through an OFS in January 2015. It had then mopped up about Rs 23,000 crore.

The government currently holds 78.32 per cent stake in Coal India. Coal India is the first PSU OFS of the current fiscal.

The government has already raised over Rs 10,028 crore through PSU stake sale, including by way of follow on offer of Bharat-22 ETF, and initial public offering of four PSUs — RITES, IRCON, Mishra Dhatu Nigam Ltd (MIDHANI) and Garden Reach Shipbuilders.

The stake sale in Coal India would help the government move forward towards the Rs 80,000 crore disinvestment target in current fiscal.

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