The government is likely to consider tomorrow share sale proposals of mining companies Coal India (CIL) and and Hindustan Copper (HCL), a move which may generate up to Rs 16,000 crore.
"The Cabinet Committee of Economic Affairs would take up the share sale programmes of CIL and HCL tomorrow," a senior government official told PTI.
Last week, the Cabinet had deferred a decision on these two proposals.
The government plans to sell its 10 per cent stake in CIL through IPO. The government holds 100 per cent equity in the coal major.
Coal Minister Sriprakash Jaiswal had earlier said that the government is expected to raise about Rs 10,000-12,000 crore from disinvestment in CIL.
In the case of HCL, the proposals is to sell 10 per cent equity and raise an equal amount of fresh shares through follow-on offer. The share sale is likely to happen at one go in both the companies later this fiscal.
In HCL, listed on the Bombay Stock Exchange, the government controls 99.59 per cent stake while the rest is with the public.
Last week, HCL Chairman and Managing Director Shakeel Ahmed had said the government plans to raise Rs 2,000 crore from equity dilution and another Rs 2,000 crore will come to the company by way of equity infusion. "Overall we look at raising about Rs 4,000 crore," Ahmed had said.
HCL is likely to file regulatory papers DRHP (Draft Red Herring Prospectus) with the Sebi by late July. CIL had earlier planned to file DRHP by June-July. However, Coal Minister Sriprakash Jaiswal had said that the share sale would depend on "market conditions" and may come by September.
HCL saw its shares closing at Rs 470.55, up 0.41 per cent over the previous close on the Bombay Stock Exchange today.
HCL plans to fund its Rs 4,200-crore expansion programme by raising equity. Both the mining companies plan to reserve shares for its employees to offer them at a likely 5 per cent discount.
CIL had a profit of over Rs 8,000 crore in the last fiscal while Hindustan Copper saw its last fiscal's profit at Rs 154.68 crore.
The government has targeted to raise Rs 40,000 crore from disinvestment this fiscal. So far disinvestment in Satluj Jal Vidyut Nigam fetched over Rs 1,000 crore to the Centre.
The government is likely to sell its stake in 10 companies it owns, including MMTC, CIL, SAIL and RINL this fiscal. Last fiscal, it had raised Rs 25,000 crore through stake sale in Oil India, NMDC, REC and NTPC.
