Having decided to sell its 5 per cent stake in Coal India ltd (CIl) through the auction route which would garner over Rs8,400 crore, the Government has now begun the process of selecting the merchant bankers for the implementing the procedure.
The Department of Disinvestment (DoD) has put a request for proposal (RFP) document on its website for selecting merchant bankers for CIl's disinvestment. “The Government intends to disinvest 5 per cent of paid up equity capital or over 31.58 crore shares of CIl through Offer for Sale of shares by promoters through the stock exchanges,” the document says.
The Government currently holds 90 per cent stake in CIl. At the current market price of Rs268 apiece, the 5 per cent stake sale would fetch Rs8,463 crore to the exchequer.
The Government will select up to seven merchant bankers for managing the disinvestment and has invited bids from them by August 26. It would also allot shares to CIl employees at a discount of 5 per cent to the lowest cut-off price up to a maximum of 10 per cent of the OFS size following completion of the disinvestment.