Follow Us:
Friday, April 10, 2020

FinMin likely to seek Cabinet nod for 10% stake sale in CIL

The plans for a 5% listing in the PSU were shelved last fiscal after opposition from trade unions.

Written by Surabhi | New Delhi | Published: July 18, 2014 2:04:39 am

The Centre is gearing up for a big bang stake sale in state-run Coal India Ltd that could help meet half the target from disinvestment proceeds for this fiscal. The stake sale is being planned for September, along with disinvestment in a host of public sector units including ONGC Ltd, Steel Authority of India Ltd and MOIL.

The finance ministry is expected to seek Cabinet approval for a 10 per cent stake sale in Coal India that could fetch Rs 23,700 crore. Though plans for a 5 per cent listing in the PSU were shelved last fiscal after opposition from trade unions, this time around the government is more optimistic.

“The issue has not been broached this time in talks with either the coal ministry or the company itself. We are hopeful that the stake sale will go through this time,” said a senior official.

The Centre currently holds 90 per cent stake in CIL after a 10 per cent initial public offering in 2010.

However, further disinvestment in the coal miner was stalled after its trade unions threatened to go on strike. In lieu of the stalled disinvestment last fiscal, CIL had paid an interim dividend of over Rs 18,000 crore to the Centre to help finance the fiscal deficit.

Meanwhile, confident of meeting the Rs 43,425 crore target from stake sale proceeds this fiscal, the finance ministry is also finalising plans for a 10 per cent stake sale in MOIL Ltd.

“We have sought comments from Madhya Pradesh and Maharashtra governments that also hold stake in MOIL. Once they give the go-ahead, we will finalise the proposal,” the source said.

The state-run manganese miner has a curious structure where the Centre holds 71.57 per cent stake in MOIL, while Maharashtra holds 4.62 per cent and Madhya Pradesh owns 3.81 per cent equity in the firm.

The Centre had listed MOIL in 2010 with a 10 per cent disinvestment that fetched Rs 1,200 crore.

Meanwhile, a 5 per cent stake sale in Steel Authority of India Ltd is also being planned that could raise about Rs 1,800 crore. The Cabinet had in July 2012 cleared disinvestment of 10.82 per cent government equity in the PSU and the first tranche of stake sale comprising 5.82 per cent equity was completed in March 2013.

📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines

For all the latest Business News, download Indian Express App.