The government is set to sell an up to 3% stake in Coal India for around ₹4,000 crore as the government continues to offload shareholding in public sector firms. The shares of the coal miner fell over 4% in early trade.
What Happened? Coal India said on Tuesday the Ministry of Coal had proposed to sell a total of 9.24 crore equity shares, or a 1.5% stake, to non-retail investors on June 1 and to retail and non-retail investors on June 2.
The floor price for the offer for sale (OFS) is set at ₹225 per share, which is a 6.7% discount from the stock’s last closing price of ₹241.20 on Wednesday. The proposal also includes a greenshoe option to sell an additional 1.5% stake if the OFS is oversubscribed.
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Once the sale is complete, employees of Coal India may also get the chance to buy up to 5% of the company’s stock.
The government has been looking to divest 5% to 10% of its stakes in Coal India, Hindustan Zinc and Rashtriya Chemicals and Fertilizers, Bloomberg previously reported.
Coal India on Tuesday announced an 8% price bump for non-coking coal, which could cover half of the firm’s higher employee costs following a wage hike in January 2023. The price hike kicked in on Wednesday and is the first since January 2018.
Price Action: Coal India’s share price was up 4.5% to ₹230.40 near the start of trade on Thursday.
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