In the biggest ever disinvestment exercise, the government’s 10 per cent stake sale in Coal India today got over subscribed by 1.05 times and fetched about Rs 22,600 crore although retail investors did not bid so aggressively.
This is also the biggest ever share sale by any private or public sector company in India and exceeds the previous record of over Rs 15,000 crore made by CIL itself in 2010.
However, the retail demand seemed lacklustre as 12.63 crore shares reserved for these investors could get bids for less than half the size (5.37 crore).
General category investors, which include FIIs, mutual funds, banks and insurance companies, bid for 1.2 times the shares reserved for them. Of the 50.53 crore shares on block for non-retail segment, bids for 60.83 crore shares came in.
The average bid price was however higher at Rs 360.11 for the retail category as against floor price of Rs 358. Retail investors would get a price discount of five per cent.
The total issue of 63.16 crore shares got bids for 66.20 crore shares, generating demand worth nearly Rs 24,000 crore on offer, as per stock exchanges data. The issue got over-subscribed before the close of market hours.
The government had offered to sell 31.58 crore shares, or five per cent stake, in CIL through a public offer, with an option to sell another 5 per cent.
At the floor price of Rs 358 apiece the public offering is estimated to fetch Rs 22,600 crore to the exchequer. This will make up for more than half of the budgeted disinvestment target.
Coal India was the second PSU to hit the market under the government’s disinvestment programme in the current fiscal, the first being SAIL in which shares worth about Rs 1,700 crore were sold.
This was the first disinvestment in which the shares reserved for retail investors were doubled to 20 per cent. A minimum of 25 per cent of the issue size were reserved for mutual funds and insurance companies.
Shares of Coal India closed at Rs 360.85, down 3.81 per cent over previous close on the BSE.
Government currently holds 89.65 per cent stake in Coal India, which was listed through a record initial public offering (IPO) in October 2010, raising Rs 15,199 crore. At the IPO price of Rs 245 apiece, the issue was over subscribed 15 times.
The other major stake sale lined up is in Oil and Natural Gas Corp (ONGC), which is expected to fetch at least Rs 15,000 crore.
The other companies lined up for stake sale include NMDC, Indian Oil Corporation (IOC), Bharat Heavy Electricals (BHEL), National Aluminium (Nalco) and Dredging Corporation (DCIL). Five per cent stake sale in PFC and REC are also on cards.