The union cabinet on Wednesday approved a further divestment of 10 percent government stake in Coal India Ltd.(CIL).
"The disinvestment of 10 percent stake in Coal India Ltd. was one of the major cabinet decisions today (Wednesday)," Coal and Power Minister Piyush Goyal told reporters here after the meeting.
"The terms and time of the divestment will be decided by the finance ministry and the department of disinvestment," he added.
The government hopes to raise between Rs.23,000 crore and Rs.24,000 crore through this stake sale.
"The government of India intends to disinvest 10 percent paid-up equity capital (63,16,36,440 shares with a face value of Rs.10 each) of CIL out of its shareholding of 78.65 percent through the offer for sale of shares by the promoters through stock exchanges method as per the Securities and Exchange Board of India rules and regulations," a notice from the department of disinvestment said earlier this year.
The Centre has sought bids from merchant banks and brokers to take the process forward. It will select five such banks or brokers to manage the issue.
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The government is also considering allotment of shares to eligible and willing employees of CIL at a discounted price.
As per the proposal from the disinvestment department, the authorised capital of CIL stands at Rs.8,904.18 crore, which comprises of Rs.904.18 crore non-cumulative 10 percent redeemable preference shares and Rs.8,000 crore equity shares.
The subscribed equity capital as of March 31, 2014, stands at Rs.6,316.36 crore.
In January-end, the government sold 10 percent stake in CIL, which fetched Rs.22,557 crore.
A majority of CIL workers went on a one-day general strike in early September to protest the Centre's disinvestment move in the company.
The Confederation of Indian Industry (CII) on Wednesday welcomed the cabinet decisions on disinvestment.
"The major decisions of the cabinet committee on economic affairs to disinvest 10 percent stake in Coal India and make initial public offering for Cochin Shipyard Ltd. send out the right signal that the government is fast-tracking reforms," CII director general Chandrajit Banerjee said in a statement here.