Six merchant bankers to manage Coal India IPO

Six merchant bankers- Citibank, Deutsche Bank, DSP Merill Lynch, Morgan Stanley, Enam Securities and Kotak Securities have been appointed to act as Book Running Lead Managers (BRLMs) for the Initial Public Offer (IPO) of Coal India Limited (CIL).

These merchant bankers have been appointed in response to the Request For Proposals (RFP) invited from the Category-I merchant bankers registered with the Securities and Exchange Board of India (Sebi) to act as BRLMs on CIL's IPO, said the company's chairman Partha S Bhattacharyya.

The RFPs were floated by the Union disinvestment ministry in the last week of April this year.

Though CIL's IPO was originally scheduled for August this year, the offer may be delayed by two months. CIL chairman admitted that the IPO may be delayed by a couple of months as the offer needed the approval of the Union Cabinet and the Centre was thinking of delaying the IPO if the market conditions were not favourable.

The disinvestment of the navratna coal firm will enable the Centre to raise Rs 12,000 crore.

The Centre is planning to offload 10 per cent stake in CIL's paid-up equity share capital which stands at Rs 6,316 crore.

One per cent of the offer, which will be through the 100 per cent book building process, will be reserved for the four lakh odd employees of CIL and its eight subsidiaries.

Meanwhile, the six BRLMs will form a syndicate in consultation with the Government of India, as required under the guidelines of the Securities and Exchange Board of India (Sebi).

These merchant bankers will also assist and advise the government on CIL's disinvestment process. CIL has set a target for filing the Draft Red Herring Prospectus (DRHP) with the Sebi by June 15.

The coal major is set to have a series of meeting with the Sebi in the run-up to its IPO.

Besides advising the government on the timing and modalities of the IPO, the BRLMs will structure the IPO in conformity with the prevailing framework an guidelines of Sebi and the stock exchanges, Securities Contracts and Regulations Act, 1957 and Companies Act of 1956.