The Indian Government has initiated the process to sell a stake of up to 9% in state-owned Coal mining company Coal India as part of its plan to achieve its divestment target.

In a stock exchange filing, Coal India noted that the government will divest a 3% interest in the company by selling up to 186.2 million shares at a floor price of Rs266 ($3.59) per equity share through the offer for sale (OFS) route over a two-day period.

The government currently owns a 78.3% stake in the coal mining firm. In case of oversubscription, the offer could be extended to include an additional 6% stake, taking the overall divestment to 9%.

In a previous round, the centre offloaded a 10% interest in the company in January 2015, which fetched around Rs230bn ($3.11bn).

“The government has reserved a 5% stake in Coal India for the company’s employees, who will also be entitled to a 5% discount.”

India recently conducted roadshows in the US, the UK, Hong Kong and Singapore to attract investors to participate in the Coal India stake sale.

Following the offer launch, institutional investors placed bids worth Rs43bn ($581.88m) and oversubscribed the shares reserved for them, the Press Trust of India (PTI) reported.

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The initial stake sale of 3% will get around Rs50bn ($676.61m) to the government’s coffers, while the additional 6% sale is expected to fetch a further Rs100bn ($1.35bn), increasing the total proceeds to Rs150bn ($2.02bn).

Retail investors are also expected to participate in the OFS programme and will get a 5% discount on the offer price.

In addition, the government has reserved a 5% stake in Coal India for the company’s employees, who will also be entitled to a 5% discount.

Indian public sector undertakings (PSUs) are required to maintain a mandatory public shareholding of 25%, according to a decision taken by the country’s securities market regulator Securities and Exchange Board of India (SEBI) in 2014.

During the first half of this year, Coal India registered a 10.6% production growth and an 8.1% rise in total coal supplies when compared to the same period last year.

The company achieved gross revenue of Rs1271.62bn ($17.2bn) from sales in FY2017-18.