The government is planning to increase its disinvestment target in Coal India (CIL) from 10 per cent proposed earlier to 15 per cent as it wants to put a sizeable number of shares in the market and also offer them to employees and farmers displaced by its mines.

"The company wants to offer a chunk of shares in the market so that there is an adequate floating stock for trading," a Coal Ministry official said, adding that it would be only through enough offering that CIL would be able to discover its valuation.

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The company, which has a paid-up equity capital of about Rs 6,316 crore, clocked a pre-tax profit of Rs 8,738.46 crore in the last fiscal. It plans to offer stock options to over 4 lakh employees. Besides, it would also offer shares to the displaced farmers as part of the compensation. CIL has mines spread in Chattishargh, orissa and Jharkhand on land acquired from farmers.

While the officials did not specify any time-frame on the IPO, the company and the ministry is in touch with market regulator Sebi on the proposal.

CIL Chairman P S Bhattacharyya had met Disinvestment Secretary Sunil Mitral last month to discuss the stake-sale proposal.

The government which owns 100 per cent equity in the company has already given it permission to change the face value the share to Rs 10 from Rs 1,000, a move aimed at expanding the firm's equity base.     

Prior to the proposed stake-sale, the coal ministry would have to introduce a bill to amend the present Coal Mines Nationalisation Act.     

CIL has an estimated coal reserves of up to 100 billion tonnes and over 80 per cent market share in the country.     

The company produced about 403 million tonnes of coal last fiscal and became the world's largest coal producer in terms of output in the period.     

The company has a capital expenditure plan of Rs 3,200 crore for this fiscal and aims to increase production by 7.5 per cent to 435 million tonnes by the end of the current financial year.

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