CIL stake sale: Deadline for merchant bankers extended again

New Delhi: Government has again extended the date by another three weeks for submission of bids by merchant bankers interested in managing the Coal India's (CIL) 10 percent stake sale, which may fetch around Rs 19,600 crore.

The government, which owns 78.65 percent of Coal India, had on August 12 sought bids from banks by September 2 to manage the share offering. Following that on September 1, it extended the date for submission of bids to September 23.

The Department of Disinvestment (DoD) in a notice last week said the last date of submission of bids for engagement of merchant bankers and selling brokers for the disinvestment in CIL through Offer for Sale has been extended by three weeks.

"The proposal can now be submitted latest by 1500 hours on October 14," it added.

Five bankers will be selected for the offering, the notice said without giving a timetable for the share sale.

The merchant banker is to advise the government on the timing and the modalities of the OFS as well as ensure best returns from the share sale.

Coal India shares were trading 2.20 percent down on the BSE at Rs 311.60 a piece today. At the current market price, sale of 63.16 crore shares or 10 percent stake would fetch about Rs 19,600 crore to the exchequer.

The government missed its divestment target for the last five years.

Against the stiff target of raising Rs 69,500 crore from disinvestment in the current fiscal, the government has so far managed Rs 12,600 crore through sale of shares in four PSUs. The government last raised over Rs 9,300 crore through sale of 10 percent in Indian Oil Corp (IOC) on August 24.

Of the total disinvestment target, Rs 41,000 crore is expected to come from minority stake sale in PSUs, and another Rs 28,500 crore from strategic stake sale.

CIL was listed on stock exchange on November 4, 2010, and its market value stands at Rs 2,34,621 crore.

Employees of CIL would be eligible to apply for shares worth up to Rs 2 lakh and would be offered a discount of up to 5 percent on the issue price, the DoD notice said.

Besides Coal India, the DoD has also lined up over two dozen PSUs, including ONGC, BHEL, NALCO, NMDC, MMTC and Engineers India for stake sale.