Govt approves 10% stake sale in CIL, Hindustan Copper

NEW DELHI: The government on Tuesday approved disinvestment of 10 per cent equity each in mining companies Coal India Ltd and Hindustan Copper Ltd. (Watch)

The decision was taken at a meeting of the Cabinet Committee on Economic Affairs that was presided over by Prime Minister Manmohan Singh.

"Disinvestment of Coal India Ltd would be through book building process in the domestic market. One per cent of the equity will be offered to the employees of Coal India Ltd and its eight subsidiaries," Home Minister P Chidambaram told reporters after the CCEA meeting.

The Committee also decided to allow five per cent price concession to retail investors and employees of Coal India Ltd (CIL). The paid up equity capital of CIL is Rs 6,316.36 crore and the government owns 100 per cent stake in the coal major.

For the disinvestment of Hindustan Copper Ltd, there will be a fresh issue of equity to extent of 10 per cent of the pre-issued paid up capital.



"In conjunction with the issue of the equity, government will also disinvest its 10 per cent pre-issued paid up capital of the company (Hindustan Copper)," Chidambaram said.

Coal India had been looking to launch its offering by August, although a government official recently told Reuters that a September listing was planned.

The stake sales in Coal India and Hindustan Copper are part of a government plan to offload minority holdings in 60 state firms in coming years. The government aims to generate 400 billion rupees ($8.5 billion) via stake sales in state firms in this fiscal year, although persistently weak markets could make that a difficult target.