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.”
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