The Cabinet today approved 10 per cent 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 per cent 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.
At current market capitalisation, 10 per cent stake sale could fetch about Rs 21,137.71 crore. Government holds 79.65 per cent 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.
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 per cent stake sale each in OIL, Nalco, NMDC, and 5 per cent each in NTPC, ONGC, BHEL.