Coal India stake sale begins

The government on Friday started the sale of 10 percent stake in state-owned Coal India in order to meet the fiscal deficit.

The share sale that began at 9.15 a.m. will end at 3.30 p.m. It has been dubbed as the biggest ever offering in the domestic equity market.

The decision to sell the stakes was reportedly cleared by a ministerial panel headed by Union Finance Minister Arun Jaitley.

The government is expecting to garner about 22,600 crore rupees from today's sale.

It has fixed 358 rupees per share as the floor price, which is at a discount of about 5 percent from the current market price of Coal India shares.

The government presently holds nearly 90 percent stake in the CIL and Coal India's divestment will play a crucial role in curtailing the fiscal deficit.

The divestment target this year is 58,425 crore rupees, out of which 43,425 crore rupees is expected to come via share sale in the PSUs. The government targets to double the coal production to one billion tonnes in the next few years.

With the Centre holding a reported 89.65 percent stake in Coal India, the shareholding reportedly needs to be reduced to 75 percent to abide by the minimum shareholding norms for listed companies.