India seeks RM8.3b from stake sale in coal miner

By BLOOMBERG

NEW DELHI • India would sell as much as 9% in monopoly miner Coal India Ltd in a public offer starting yesterday, according to a regulatory filing by the country’s Coal Ministry.

The federal government, which owns 78.55% in the world’s largest coal producer, will sell a 3% stake, or 186.22 million shares, with an option to sell an additional 6%, according to the filing.

The minimum price for the offer is 266 rupees a share, which will fetch the government at least 148.6 billion rupees (RM8.34 billion).

Coal India shares fell as much as 4.4% to 263.80 rupees in early trade in Mumbai yesterday, the biggest intraday drop since Oct 5. The stock has declined about 7.1% in the past year, compared to a 2.3% gain in the benchmark S&P BSE Sensex.

The sale is part of Prime Minister Narendra Modi’s plan to raise 800 billion rupees through share sales this financial year to meet a budget deficit target and to fund infrastructure such as roads, power transmission lines and railway tracks ahead of elections next year.

The government has raised 100.29 billion rupees selling state assets since April 1.

“Coal India’s earnings have bottomed out and the floor price is looking attractive,” said an analyst in Mumbai. “The demand for coal remains strong from all sectors and we expect the company to ramp up production now that the monsoons are over.”

ICICI Securities Ltd and Kotak Securities Ltd, among others, will manage the sale.