India To Sell 10 Percent Stake in Coal Mining Monopoly

India will sell as much as 10 percent in monopoly miner Coal India Ltd. in a public offer on Jan. 30, according to a regulatory filing.

The federal government, which owns 89.65 percent in the company, will sell a 5 percent stake, or 315.8 million shares, with an option to sell an additional 5 percent, according to the filing. At today’s closing price of 383.80 rupees, a 10 percent sale in the world’s largest coal producer will raise 242.4 billion rupees ($4 billion). The minimum price for the offer will be announced tomorrow.

Falling oil prices and proceeds from the stake sale will help Prime Minister Narendra Modi meet his target to cut a budget shortfall to the lowest in seven years. A 10 percent sale in Coal India will potentially make it the nation’s biggest public offering, according to data compiled by Bloomberg.

“This takes care of the government’s concerns of meeting its fiscal deficit target,” Deven Choksey, managing director at Mumbai-based brokerage KR Choksey Shares & Securities Pvt., said by phone today. “The broader market may underperform during the offer period as some funds may be diverted to Coal India share sale.”

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza