Coal India IPO could raise $3.5 billion: Report

NEW DELHI: State-run Coal India could raise more than 3.5 billion dollars in its giant initial public offering ( IPO), which would be the country's biggest share sale, a report said on Monday.

The country's largest coal miner aims to sell 10 percent of its government-held equity as part of New Delhi's plan to raise a record 8.5 billion dollars from asset sales by March next year.

Coal India has said it will launch the IPO on October 18.

The government is likely to fix the upper price band for the IPO at about 260 rupees per share, which could help it raise over 160 billion rupees (3.5 billion dollars) if the offer is fully subscribed, the Press Trust of India reported.

A cabinet panel is due to decide on the pricing on October 12, the news agency said, quoting an unnamed person close to the IPO.

Coal India chairman P.S. Bhattacharyya declined to comment on the offer price, saying "the decision will be taken by ministers' group".

Coal India is set to offer 631.64 million shares in the four-day sale.

India's largest IPO so far was the 2.46 billion dollars raised by billionaire Anil Ambani's Reliance Power in January 2008, according to the Prime Database, which tracks share offerings in India.

The government's disinvestment policy aims to raise funds to help the millions in India who live in desperate poverty and to bring down the country's fiscal deficit.

India is the world's third biggest producer of electricity from fossil fuel and appears set on coal for its future energy needs as the economy develops.

The ministry overseeing the industry maintains that coal will continue to take "centre stage of India's energy scenario" in the years to come.