Government to sell another 10 per cent stake in Coal India

NEW DELHI/KOLKATA: The government will sell another 10 per cent stake in Coal India, which could fetch more than Rs 23,000 crore at the current market price and provide a much needed boost to the disinvestment programme that has a record target of Rs 69,500 crore for current fiscal.

The disinvestment department on Wednesday called for request from merchant bankers to manage the issue. The government currently owns a 78.65 per cent stake in the coal miner.

Coal India’s shares closed 5.53 per cent lower at Rs 371.45 on the BSE on Wednesday, when the benchmark Sensex fell 1.3 per cent.

The government will appoint up to five merchant bankers to manage the issue. The deadline to apply is September 2.

Coal India’s employees will be eligible to apply for shares worth up to Rs 2 lakh each. They will be issued shares at a discount of up to 5 per cent on the issue price, the department said.

The government had on January 31 sold a 10 per cent stake in the company netting Rs 22,557 crore. The government may find it difficult to convince Coal India unions, which had opposed the previous stake sale.

The government has so far sold stakes in Rural Electrification Corp and Power Finance Corp that together raised more than Rs 3,000 crore this year.

Q1 NET PROFIT DOWN 6.67%

The state-run miner posted a 6.67 per cent fall in first-quarter net profit as price realisation declined and it spent more on corporate social responsibility programmes and contracts. For the quarter through June, the company posted a profit of Rs 3,764 crore. Net sales rose 6.5 per cent to Rs 19,518 crore.

"Average realisation from e-auction was Rs 2,148 in the just-concluded quarter against Rs 2,246 in the previous corresponding quarter," Chairman Suthirtha Bhattacharya said. "We sent relatively more coal to power houses while coal sold through e-auction remained the same during the quarter."