Govt approves CIL, Hindustan Copper share sale plans

New Delhi, June 15 (PTI) The Indian government on Tuesday
approved disinvestment of 10 per cent each in Coal India Ltd
and Hindustan Copper Ltd, as it pushes its agenda to raise Rs
40,000 crore this fiscal through stake sales in PSUs.
The move, which is likely to generate about Rs 16,000
crore, was approved by the Cabinet Committee on Economic
Affairs (CCEA).
In Coal India Ltd (CIL), the government will offload 10
per cent of its equity through an initial public offering.
Hindustan Copper Ltd (HCL) will issue fresh shares equivalent
to 10 per cent of pre-issue paid up capital along with
government selling 10 per cent of its stake in the firm
through a follow on public offer.
India's Home Minister P Chidambaram told reporters here
that share sale, which gives 5 per cent discount to the
employees of both the PSUs, is likely to happen within six
months.
"Disinvestment of CIL would be through book-building
process in the domestic market. One per cent of the equity
will be offered to the employees of CIL and its eight
subsidiaries," Chidambaram said after the CCEA meeting.
The government holds 100 per cent equity in the coal
major, which has a total paid up capital Rs 6,316.36 crore.
Post the disinvestment of 63.16 crore shares, its holding will
be reduced to 90 per cent.
Coal Minister Sriprakash Jaiswal had earlier said that
the government could raise about Rs 10,000-12,000 crore from
disinvestment in CIL.
Through the IPO, one per cent of the equity will be
offered to nearly four lakh employees of CIL and its eight
subsidiaries a discount of 5 per cent.
"The CCEA has also decided to allow 5 per cent price
concession to retail investors in order to encourage greater
public ownership of the public sector company," Chidambaram
added.
CIL is the world's largest coal producer with an output
of 431.5 million tonnes (MT) last fiscal. It accounts for over
85 per cent of India's total coal production of 531.5 MT.
Commenting on disinvestment of HCL, Chidambaram said
there will be a fresh issue of equity to extent of 10 per cent
of the pre-issued paid up capital. "In conjunction with the
issue of the equity, government will also disinvest its 10 per
cent pre-issued paid up capital of the company."
The government has targeted to raise Rs 40,000 crore
from disinvestment this fiscal. So far, divestment in Satluj
Jal Vidyut Nigam fetched Rs 1,000 crore to the government.
The government is likely to sell its stake in 10 PSUs,
including MMTC, SAIL and RINL this fiscal. Last fiscal, it
had raised Rs 25,000 crore through stake sale in Oil India,
NMDC, REC and NTPC.
The disinvestment in HCL, 0.41 per cent stake of which is
already with the public, will see the government holding
coming down to 81.45 per cent from 99.59 per cent at present.
HCL's follow-on offer will see the firm issuing fresh
shares aggregating up to 9.25 crore shares of face value of Rs
5 each, with government selling a similar quantum of shares.
Shares of HCL jumped 11.15 per cent to Rs 523 on BSE
during mid-day trade.
Copper mining firm HCL turned profitable last fiscal and
is looking to expand its operations, for which it plans to
fund its Rs 4,200-crore augmentation programme.
HCL plans to raise copper ore production from 3.15
million tonne per annum (mtpa) to 12 mtpa and has plans to
expand capacity of its mines and projects including the
Khetri mines in Rajasthan, Malanjkhand Copper Project in
Madhya Pradesh and Surda mines in Jharkhand.
The divestment and fresh equity issue is likely to fetch
Rs 4,000 crore, half of which will go to the government, Mines
Minister B K Handique had said last week. PTI SCV
MRD