New Delhi: The Cabinet Wednesday approved 10 percent stake sale in Coal India and initial public offer of Cochin Shipyard amid growing concerns over meeting Rs 69,500 crore disinvestment target in the current fiscal.
"Government has approved sale of 10 percent stake in Coal India Limited (CIL)," Coal and Power Minister Piysh Goyal told reporters after the Cabinet meeting here.
Asked about government's expectations from the stake sale in the CIL, Goyal said it hopes to mop up around Rs 20,000 crore.
ALSO READ: Govt approves 10% stake sale in Coal India, eyes 20K cr
At current market capitalisation, 10 percent stake sale could fetch about Rs 21,137.71 crore. Government holds 79.65 percent stake in Coal India.
CIL worker unions, however, have been opposing the stake sale in the national miner.
The Cabinet has also approved the proposal for issue of an Initial Public Offer (IPO) of Cochin Shipyard Ltd (CSL).
According to an official statement, the approval is for the public issue consisting of 3,39,84,000 equity shares of Rs 10 each amounting to an equity capital of over Rs 33.98 crore of CSL.
The IPO will consist of fresh issue of 2,26,56,000 equity shares and sale of government's stake in CSL worth 1,13,28,000 equity shares of Rs 10, through a public offering in the domestic market.
ALSO READ: Coal India unions oppose 10% stake sale in PSU
The fresh shares are being issued by CSL to part-finance its expansion like setting up of an International Ship-repair Facility (ISRF) at Cochin Port Trust area and Setting up of a large dry dock within the CSL premises to take up construction of larger ships such as large sized Aircraft Carriers and VLCCs as well as to take up underwater repairs to rigs and semi submersibles.
The statement said the IPO will raise resources for the government due to the sound financial condition of CSL.
There would be no financial outgo from the government on account of the issue of shares. Instead, the government would earn revenue due to sale of its shares to the public, it said.
The government has budgeted to raise Rs 69,500 crore through disinvestment in the current fiscal.
Of this, Rs 41,000 crore is to come from minority stake sale in PSUs and the remaining Rs 28,500 crore from strategic stake sale.
With seven months of the fiscal over, the government has been able to raise Rs 12,600 crore through stale sale in four PSUs as volatile market conditions have dented disinvestment plans.
For disinvestment in 2015-16, the government has a pipeline of over 20 PSUs for which it has the Cabinet approval. These include 10 percent stake sale each in OIL, Nalco, NMDC, and 5 percent each in NTPC, ONGC, BHEL.
Commenting on Coal India disinvestment, coal and power minister Piyush Goyal said, "Every single job is protected. My own dialogue with the labour unions is a continuing process. They are extremely happy at the way their company is progressing."
"I and my government is very proud of the excellent work done by the employees of Coal India Ltd," Goyal said.
An official release today said the Cabinet Committee on Economic Affairs, under the chairmanship of Prime Minister Narendra Modi, has approved the disinvestment of 10 percent paid up equity capital of Coal India Ltd.
"This implies divesting of 63,16,36,440 shares of face value of Rs 10 each out of the Government of India shareholding of 78.65 percent (after adjusting one percent equity to be offered for sale to the employees of CIL as per CCEA decision in September 2014, which is under process of implementation) through public offering in the domestic market," the statement said.
After the disinvestment of 10 percent equity, the government's shareholding in CIL would come down to 68.65 percent (with slight variation based on outcome of sale of one percent equity shares to employees of CIL)," it said.
The paid up equity capital of the CIL is Rs 6,316 crore, it said.
"The disinvestment transaction will be an Offer for Sale (OFS) of shares by the promoters through the Stock Exchange Mechanism method as per the Securities and Exchange Board of India (SEBI) Rules and Regulations," the statement said.
