The Union government is looking to dilute 1.5 per cent of total paid-up equity shares in Coal India (CIL).
An offer for sale for 9,24,40,924 equity shares of face value of Rs 10 representing 1.5 per cent equity stake was announced on Wednesday with an oversubscription option of another 1.5 per cent stake at a floor price of Rs 225 per share.
The OFS will go live on June 1, 2023 for non-retail investors and on June 2, 2023 for retail investors and non-retail investors who choose to carry forward their unallotted bids.
The government, which currently holds 66.13 per cent of Coal India, is expected to garner around Rs 4,000 crore with the oversubscription option.
However, the floor price of the offer declared on Wednesday was at a discount compared with the trading price of Rs 241.2 at the close of trade of the scrips of the public sector miner at the Bombay Stock Exchange.
Around 5 per cent of the offer size would be eligible for the willing employees of the company who can apply for equity shares of up to Rs 5,00,000.
A 10 per cent of the offer shares shall be reserved for allocation to retail investors subject to the receipt of valid bids, a stock exchange filing from Coal India said.
Government had previously diluted around 3.18 per cent in Coal India in 2018-19 raising Rs 5300 crore.
Market analysts on Wednesday said the 8 per cent price hike announced by Coal India on Tuesday for its high-grade G2-G10 non cooking coal would partially offset the higher wage bill and will have more impact on non-power consumers who utilise high-grade coal than power utilities.
“The last FSA (fuel supply agreement) price revision was taken in 2018 and Coal India has now taken the first major price hike.
“This is expected to offset almost 50 per cent of the wage bill following the mutual agreement between Coal India and central trade unions under NCWA-XI.
“The price hike affects around 30 per cent of the volumes,” Motilal Oswal Financial Services said in an update on the company.
The brokerage expects Coal India to realise an incremental revenue of Rs 2700 crore from the price hike in 2023-24.