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Indian govt to divest 9% of Coal India equity

31st October 2018

By: Ajoy K Das

Creamer Media Correspondent

     

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KOLKATA (miningweekly.com) – In a sudden move, the Indian government on Wednesday announced that it would disinvest 9% of its equity holding in Coal India Limited (CIL) through an offer for sale (OFS) to institutional and retail investors.

The sale of 9% equity from total existing government holding of 78.32% was expected to net the government an estimated $2-billion assuming full subscription of the OFS at the floor price fixed at Rs 266 ($3.6) a share.

The OFS has been scheduled to open on Wednesday for institutional and retail investors.

The disinvestment in CIL was significant as the regulator, Securities and Exchange Board of India had stipulated that all government companies would have to mandatory bring down government-held equity to 75%, and the deadline for which passed in August 2018.

“Twenty per cent of the offer size shall be reserved for retail investors, subject to receipt of valid bids. No single bidder other than mutual funds and insurance companies shall be allocated more than 25% of the offer shares,” CIL said in a statement.

CIL said that under the greenshoe option, the company would have the option to offer 6% of equity shares of the company through over-subscription and collectively this would represent 9% of the total paid up capital of the company as on October 30, 2018.

Edited by Creamer Media Reporter

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