Coal India slips nearly 5% as govt picks banks for stake sale

NEW DELHI: Coal India Ltd slipped as much as 4.6 per cent in morning trade on Friday, after reports suggested that the government selected seven banks to manage the stake sale in Coal India which could raise $1.2 billion.

At 10:00 a.m.; Coal India recouped some of the losses and was trading 1.8 per cent lower at Rs 245.30. It has hit a low of Rs 238.35 and a high of Rs 250.05 in trade today.

The divestment is part of a state sell-off programme to raise Rs 40,000 crore ($5.87 billion) in the fiscal year ending next March to plug a yawning current account deficit and stave off a threatened ratings downgrade, Reuters reported.

The five trade unions representing Coal India staff plan to strike for three days from Sept. 23 to protest the share sale and back other demands.

The government raised $3.4 billion through an initial public offering of 10 per cent of Coal India in 2010. If the latest proposed sale goes through, its stake will fall to 85 per cent.

The company's trade unions have said the government pledged not to reduce its stake below 90 per cent.