Coal India Helps PM Modi Break Divestment Record
After the successful Coal India share sale, the Narendra Modi government has set a new record for highest-ever divestment proceeds in a year. And now the government is aiming even higher.
The 10 per cent share sale in Coal India will fetch the government Rs 22,557.63 crore. In biggest share sale ever, the government put on offer 63.16 crore shares of Coal India. The offer was oversubscribed, with investors bidding for 67.52 crore shares. Prior to the Coal India share sale, the government had managed to raise just Rs 1,715 crore through selling stakes in steel maker SAIL.
Till date, the highest-ever divestment collection in a year was Rs 23,956 crore in 2012-13.
Disinvestment Secretary Aradhana Johri told NDTV that this was the appropriate time for divestment in Coal India. "When the annual plan was made, the government was expecting Rs 15,000 crore from coal India divestment and now have got Rs 7,000 crore more," she said.
The divestment secretary expressed confidence that the government will get the highest divestment collection ever this year, saying a couple of more issues could be in the offing this fiscal.
Most of the analysts had given a buy call on Coal India shares. Domestic brokerage IIFL believes Coal India would be the biggest beneficiary of the government's focus on fuel security. Nomura said the government's bottom-up blueprint for Coal India can help the miner achieve 1 billion tonnes coal production by FY20.
The Modi government has budgeted to raise nearly Rs 58,425 crore by selling small stakes in state-run and other firms.
The strong investor response to the Coal India issue is expected to bolster the government's plans to offload shares in other state firms including Oil and Natural Gas Corp and Power Finance Corp.
Overseas and local portfolio investor demand for Coal India shares exceeded supply, with their category oversubscribed by 1.2 times.
Retail participation however was not 100 per cent. But the divestment secretary said "we need to see the glass half full" while addressing a press conference.