Govt for selling 10% Coal India stake via IPO route

The government, which yesterday decided to sell 10% stake in Nalco, is now actively contemplating offloading 10% stake in the Coal India (CIL) through the initial public offer (IPO) route.

"The finance minstry has asked us to explore the possibility of offloading certain amount of government stake in CIL. We are accordingly deliberating on the issue. However, it is not known whether the disinvestment proceeds would be utilised for funding CIL's modernisation plans,"
official sources said.

Offloading government stake to the tune of 10% could mobilise more than Rs 7,000 crore. The finance ministry has also asked the public sector behemoth to solicit the opinion on probable valuation of the company, sources said.

Galvanised by the proposed move, CIL has begun deliberations with the ministry on various issues related to disinvestment. It has an equity base of more than Rs 6,000 crore with equity shares amounting to nearly Rs 1,000 each, sources said.

It may be recalled that earlier the T L Shankar committee too had recommended disinvestment of nearly 50% in the Central Mine Planning and Design Institute (CMPDI) but somehow the offloading of stake remained in limbo.

It was not immediately known whether the government would stick to its earlier plan of splitting shares in 1:100 ratio, i.e each Rs 1000 face value share split into 100 shares of Rs 10 face value, before the IPO.