State-owned life insurer Life Insurance Corporation of India has picked almost half of the shares in government's offer for sale in Coal India Ltd as part of its disinvestment plan. The insurance behemoth has been a saviour for the government in the past in several such disinvestment plans where it bought stake in other public sector units.
LIC is counted as an institutional investor and not part of the government even though it is owned and controlled by the central government.
Based on the floor price of Rs 358 per share, LIC is estimated to have shelled out around Rs 10,200 crore (approximately $1.64 billion) for the stake it acquired in Coal India.
The offer for sale was oversubscribed and garnered around Rs 22,558 crore (approximately $3.6 billion) in the offering last Friday. This also marked a record in terms of a public issue where Coal India beat its own record, having raised a record amount a few years ago in its IPO.
The life insurer disclosed it bought over 284.7 million equity shares or 4.51 per cent additional equity stake in the recently concluded offer for sale of the world's largest coal miner.
With the acquisition, the total holding of LIC in Coal India has risen to 7.24 per cent, up from 2.73 per cent earlier.
The sale also brought down the government's stake in Coal India to 79.65 per cent from 89.65 per cent earlier.
The government had offered 631.6 million equity shares or 10 per cent stake in Coal India. The sale attracted bids for 675.24 million shares.
Although the Coal India divestment garnered a big amount, it is still far from meeting its disinvestment target of around $10 billion in the current financial year.
On Monday, shares of Coal India closed at Rs 354.90, down 1.65 per cent on the BSE in a weak Mumbai market.
(Edited by Joby Puthuparampil Johnson)