The government will sell 31.58 crore shares, or five per cent stake, in a public offer, with an option to sell another 5 per cent, Coal India said in a regulatory filing.
The disinvestment will help the government meet half of the Rs 43,425 crore revenue target from stake sale in public sector.
At today's closing price of Rs 384.05, a 10 per cent stake sale in the world's largest coal producer will raise Rs 24,257 crore.
Government currently holds 89.65 per cent stake in Coal India, which was listed through a record initial public offering (IPO) in October 2010, raising Rs 15,199 crore.
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With only Rs 1,715 crore being raised this fiscal by way of disinvestment, the government is looking at aggressively selling stakes in public sector firms to help meet its fiscal deficit target of 4.1 per cent of GDP for the year ending March 31.
The other major stake sale lined up is in Oil and Natural Gas Corp (ONGC), but the slumping oil prices have dampened the company's prospects.
For the Coal India stake sale, the government has doubled to 20 per cent the quota reserved for retail investors, who can buy shares worth up to Rs 2 lakh in the share sale. They would also be given a 5 per cent discount to the bid price entered by them.