Sale of CIL stake fetches `22,557 cr; LIC big buyer
WHEN BLACK IS GOLD
NEW DELHI: In the biggest-ever disinvestment exercise, the government on Friday mopped up `22,557.63 crore from 10% stake sale in Coal India Ltd (CIL), largely aided by domestic financial institutions. The divestment will bring down the government’s shareholding to 79.65%.
Of the 631.6 million shares on offer on Friday bids were received for 662.0 million. Insurance firms bought shares worth `11,360.13 crore, with state-run LIC rumoured to have picked up more than one-third of the stake.
Over-subscribed 5%, the share sale received bids worth `24,210 crore. This is the biggest share sale by any private or public sector company, and covers up for more than half of the government’s budgeted disinvestment target for 2014-15. It also exceeded the previous record of over `15,000 crore made by CIL itself in 2010, when the government sold 10% in the coal major.
The retail investor portion, however, remained under-subscribed with bids received for only less than half (55.6 million) of the 126.3 million shares on offer. In value terms, they bid for shares worth `1,852.55 crore.
This was the first disinvestment in which shares reserved for retail investors were doubled to 20%. A minimum of 25% of the issue size was reserved for mutual funds and insurance companies.
The general category of investors Amount generated from govt’s 10% stake sale in Coal India
Issue oversubscribed Fall in the Sensex on Friday, its biggest decline in 3 weeks, on heavy selling in banking stocks. It ended at 29,182.95, down 499 pts Cos
ONGC NHPC Govt’s revenue target for 2014-15 through share sale in state-owned companies Revenue target for 2014-15 by selling shares in non-govt cos such as Axis Bank and L&T
including FIIs, mutual funds, banks and insurance companies bid for 1.2 times the shares reserved for them. Out of the 50.53 million shares on block for non-retail segment, CIL attracted bids for 60.83 million shares.
The average bid price for CIL shares was higher at `360.11 for the retail category against the floor, or the minimum offer, price of `358. The government went Govt stake to be sold
5% 11.36% Expected revenue `18,000 cr `2,800 cr
ahead with the CIL offer despite protest threats by labour unions who are against stake sale in the public sector giant. CIL share sale was the second major PSU divestment after the 5% stake sale in SAIL, which attracted `1,700 crore.
CIL stock ended 3.8% lower at `360.85 on the BSE in the wake of the floor price for the share sale being set at a discount of 4.5% to Thursday’s closing price.