With the state owned Coal India Limited (CIL) targeting to come out with its Initial Public Offer (IPO) by August this year, the Ministry of Coal (MoC) has requested the Department of Public Enterprises (DPE) to arrange a panel of names for filling up the post of six independent directors in CIL board.
The MoC has written to DPE for necessary action to fill up two new vacancies and four likely vacancies in CIL board so as to have 50 per cent independent directors on the board before the IPO.
As per the guidelines of Securities and Exchange Board of India (Sebi), it is mandatory for a firm to have at least 50 per cent independent directors on its board before the company is listed.
Presently, CIL has five full-time directors including Partha S Bhattacharyya, chairman and managing director; A K Sinha, director (finance); N C Jha, director (technical); R Mohan Das, director (personnel and industrial relations) and A K Sarkar, director (marketing).
The CIL board has two part-time official directors- Alok Perti, additional secretary, MoC and Sanjiv Mittal, joint secretary and financial adviser, MoC. Besides, there are five part-time non-official directors.
The Centre has decided to offload 10 per cent stake in the coal PSU and raise around Rs 12,000 crore. The MoC has provided a detailed data on CIL's disinvestment process and the Department of Disinvestment has to prepare a note in this regard and place the same before the Union Cabinet for approval.
Though CIL's IPO was originally scheduled for August this year, the offer may be delayed by two months. The Centre was thinking of delaying the IPO if the market conditions were not favourable.
One per cent of the offer, which will be through the 100 per cent book building process, will be reserved for the four lakh odd employees of CIL and its eight subsidiaries.
Meanwhile, six merchant bankers- Citibank, Deutsche Bank, DSP Merill Lynch, Morgan Stanley, Enam Securities and Kotak Securities have been appointed to act as Book Running Lead Managers (BRLMs) for CIL's IPO.
These merchant bankers have been appointed in response to the Request For Proposals (RFP) invited from the Category-I merchant bankers registered with the Securities and Exchange Board of India (Sebi) to act as BRLMs on CIL's IPO.
The RFPs were floated by the Union disinvestment ministry in the last week of April this year.
The six BRLMs will form a syndicate in consultation with the Government of India, as required under the guidelines of the Securities and Exchange Board of India (Sebi).
These merchant bankers will also assist and advise the government on CIL's disinvestment process. CIL has set a target for filing the Draft Red Herring Prospectus (DRHP) with the Sebi by June 15.
The coal major is set to have a series of meeting with the Sebi in the run-up to its IPO.
Besides advising the government on the timing and modalities of the IPO, the BRLMs will structure the IPO in conformity with the prevailing framework and guidelines of Sebi and the stock exchanges, Securities Contracts and Regulations Act, 1957 and Companies Act of 1956.
The BRLMs will also undertake due diligence activities, prepare the DRHP and undertake filing of the DRHP with the Sebi as well conduct pre-market surveys, road shows and generate interest among the prospective investors.
