Coal news and updates

CIL stake sale: Strong pitch made to foreign, domestic investors

A strong pitch has been made among investors from the US and Europe, as also various domestic funds and state-run behemoths like LIC and SBI, to participate in Coal India's mega share sale worth Rs 22,600 crore tomorrow.

As part of its ambitious divestment programme, the government would offload up to ten per cent of its stake in Coal India.

Top government officials, as also merchant bankers and advisors mandated for the share sale, have pitched hard among foreign and domestic investors for the Coal IndiaBSE -3.17 % share sale over the last few days while projecting the huge growth opportunities present in the coal sector, sources said.

The government targets to double the coal production to one billion tonnes in the next few years.

At the end of December quarter, LIC had 2.59 per cent stake in Coal India while that of the Indian government stood at 89.65 per cent.

Earlier, one of the foreign investors UK-based hedge fund TCI had issues with regard to its investment in Coal India.

In tomorrow's sale, the government would offer Coal India shares at a floor price of Rs 358 apiece for offloading up to its 10 per cent stake.

The floor price, fixed today, is at a discount of about 5 per cent from the current market price.

Meanwhile, foreign brokerage Nomura today said in a report: "As has historically been the case, we believe CIL may well consider declaring an interim dividend next month.

"As investors who buy the CIL stock in the upcoming OFS would be allocated shares on February 2/3, prospects of an imminent interim dividend (INR15/share in our FY15F earnings forecast) may well act as a sweetener."

Source: The Economic Times