Govt not to sell 25% equity in Coal India

The government said on Wednesday it will stick to 10 per cent stake sale in Coal India Ltd and the decision of 25 per cent disinvestment in listed public sector units will not be applicable in case of the state-owned firm.

"I want to clear one thing, as there is some confusion -- the disinvestment in Coal India Ltd will not be more than 10 per cent even if government decides on 25 per cent disinvestment in (listed) PSUs.

Any such decision will not be applicable on Coal India," Coal Minister Sriprakash Jaiswal told reporters in New Delhi.

The Union Cabinet had last week decided to disinvest 10 per cent of its holding in the world's largest coal producer.

The Centre holds 100 per cent equity in CIL. In June, the government announced that all the listed companies should increase the public holding to 25 per cent in a phased manner and had later said that it is open to 'amendments' in the policy.

"The IPO could be launched in September if market conditions are conducive for it," he said.

Explaining the rational behind only 10 per cent stake sale, Jaiswal said, "When we got navratna status, there was a clause that minimum 10 per cent of CIL be divested and it should be listed on the bourse within three years. We do not want to lose the navratna tag."

CIL was granted navratna status in October 2008. Talking about the trade unions opposition to the sell-off move in the coal company, he said, "We don't think that there is a very strong opposition to the disinvestment move from the trade unions. The left-wing trade unions are opposing, they have always been opposing any disinvestment proposal."

The minister did not elaborate on the fund the government is looking to raise through the disinvestment.

However, he had earlier said that a sum of Rs 10,000-12,000 crore (Rs 100-120 billion) could be raised by CIL's sell-off.

CIL is the world's largest coal producer with an output of 431.5 million tonnes last fiscal. It accounts for over 80 per cent of India's total coal production of 531.5 million tonnes as on March 31, 2010.

The government has targeted to raise Rs 40,000 crore (Rs 400 billion) from disinvestments this fiscal. So far, divestment in Satluj Jal Vidyut Nigam fetched over Rs 1,000 crore (Rs 10 billion) to the exchequer.

The government is likely to sell its stake in 10 PSUs, including MMTC, Steel Authority of India Limited and Rashtriya Ispat Nigam Limited, Hindustan Copper this fiscal. Last fiscal, it had raised Rs 25,000 crore (Rs 250 billion) through stake sale in Oil India, NMDC, REC and NTPC.