The Indian Government is to sell up to 10% of Coal India in a bid to raise around Rs240bn ($3.9bn) at the current market price, to bridge its fiscal deficit.

According to Coal India, the government plans to offload 315.8 million shares, or a 5% stake, through an offer for sale with an option to sell similar number of shares as a greenshoe deal.

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Following the sale, the government will be able to meet half of the Rs434.2bn ($7bn) revenue target from stake sales in the public sector, Business Standard reported.

"The government will be able to meet half of the Rs434.2bn ($7bn) revenue target from stake sales in the public sector."

The government is expected to announce the floor or minimum sale price for the offer.

Coal India was listed through a record initial public offering (IPO) in October 2010, which the government holds a 89.65% stake in.

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Retail investors can buy shares worth up to Rs2 lakh in the share sale and have a 20% quota. The government has doubled the quota and will also grant a 5% discount to the bid price they offer.

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A minimum 25% of the Coal India issue is expected to be reserved for mutual funds and insurance companies.

Trade unions went on strike earlier in January in protest against the stake sale; however, this was called off when the government explained their reasons to the workers.