<div>In the biggest ever disinvestment exercise, the government's 10 per cent stake sale in Coal India got over-subscribed by 1.05 times on Friday (30 January) and fetched about Rs 22,600 crore although retail investors did not bid so aggressively.<br /><br />Stocks of Coal India ended nearly 4 per cent lower in the wake of the floor, or the minimum offer, price for the company's share sale being set at a discount. CIL's scrip lost 4 per cent to Rs 360.10 in intra-day trade at the BSE and finally ended at Rs 360.85, down 3.81 per cent from its previous close. On the NSE, it fell by 3.68 per cent to settle at Rs 361.15.<br /><br />This was the biggest ever share sale by any private or public sector company in India and exceeds the previous record of over Rs 15,000 crore made by CIL itself in 2010. However, the retail demand seemed lacklustre as 12.63 crore shares reserved for these investors could get bids for less than half the size (5.37 crore).<br /><br />General category investors, which include FIIs, mutual funds, banks and insurance companies, bid for 1.2 times the shares reserved for them. Of the 50.53 crore shares on block for non-retail segment, bids for 60.83 crore shares came in.<br /><br />The average bid price was however higher at Rs 360.11 for the retail category as against floor price of Rs 358. Retail investors would get a price discount of five per cent.<br /><br />The total issue of 63.16 crore shares got bids for 66.20 crore shares, generating demand worth nearly Rs 24,000 crore on offer, as per stock exchanges data. The issue got over-subscribed before the close of market hours.<br /><br />The government had offered to sell 31.58 crore shares, or five per cent stake, in CIL through a public offer, with an option to sell another 5 per cent.<br /><br />At the floor price of Rs 358 apiece the public offering is estimated to fetch Rs 22,600 crore to the exchequer. This will make up for more than half of the budgeted disinvestment target.<br /><br />Coal India was the second PSU to hit the market under the government's disinvestment programme in the current fiscal, the first being SAIL in which shares worth about Rs 1,700 crore were sold.<br /><br />This was the first disinvestment in which the shares reserved for retail investors were doubled to 20 per cent. A minimum of 25 per cent of the issue size were reserved for mutual funds and insurance companies.<br /><br />Shares of Coal India closed at Rs 360.85, down 3.81 per cent over previous close on the BSE<strong>.<br /><br />Divestment Programme In Full Swing</strong><br />Coal India issue is part of the government's divestment agenda, and a strong investor response will bolster New Delhi's plans to offload shares in other state firms including Oil and Natural Gas Corp and Power Finance Corp Ltd.<br /><br />Prime Minister Narendra Modi is racing to meet a commitment to narrow the budget deficit to a seven-year low of 4.1 percent in the year ending in March. The deficit promise relies heavily on the asset sale programme.<br /><br />The government has budgeted it will raise $10 billion by selling small stakes in state-run firms in this fiscal year. So far it has managed to raise a little more than $300 million.<br /><br />India is the world's third-largest coal importer even though it sits on the fifth-largest reserves. Coal India produces more than 80 percent of India's total but often fails to meet output targets.<br /><br />Coal India, the largest coal producer in the world, largely feeds India's growing demand for energy. It is expected to benefit from the Modi government's drive to increase India's energy and industrial production.</div><div> </div><div>(Agencies)</div>
