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.
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 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.
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.
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.
