The government has decided to defer stake sale in Coal India this year after the share price fell sharply, close to a 52-week low, making it impossible to fetch the sum it hoped for, company officials said. The government planned to sell up to a 10% stake in the company by August to raise Rs 20,000 crore. Coal India executives said a divestment would now be considered next year, if the share price improves.
Coal India shares fell 1.34% to Rs 247.20 on the BSE on Monday. The stock has declined 23% in the past year and touched a 52-week low of Rs 243 on July 3. At the current market capitalisation, the sale of 10% equity would fetch about Rs 15,345 crore. Coal India share prices fell after profit was lower than expectations and production declined as demand growth was less than anticipated.
“The government has decided to wait till prices rise so that it can raise money according to its expectations,” a Coal India executive said. The government needs to offer shares at a discount to the market price to attract investors, he added. The government held a 78.86% stake in the company at the end of June.
“The next round of divestment was to serve a dual purpose: it would have helped the government raise funds and allowed the Centre to conform to the holding norms, which stipulate that a public listed company needs to have at least 25% shares listed on the stock exchanges,” the executive said.
Source Link – ET Energy World