Millennium Post

Centre may appoint 6-7 merchant bankers for 10% CIL throw-away

The government is mulling to appoint six to seven merchant bankers to manage 10 per cent stake sale in Coal India Limited (CIL) which is likely to fetch over Rs 17,000 crore to the exchequer.

'There is a proposal to appoint six to seven merchant bankers to manage 10 per cent equity stake in Coal India,' a government official said.

A final decision on the same will be taken shortly, the official added. In 2010, six merchant bankers- Citibank, Deutsche Bank, DSP Merill Lynch, Morgan Stanley, Enam Securities and Kotak Securities- were appointed to act as Book Running Lead Managers (BRLMs) for Coal India Initial Public Offer (IPO).

An Inter-ministerial Group (IMG) has already approved 10 per cent equity sale in the PSU firm.
At present, the government holds 90 per cent stake in Coal India Ltd.

However, the mode of disinvestment of the PSU could not be decided - whether the share sale would be through offer for sale (OFS) or buyback, and would be done taking into consideration the market conditions.

The IMG, headed by Disinvestment secretary Ravi Mathur, is guiding the process of disinvestment of government's equity in CIL.

The panel has members drawn from Ministry of Coal, Departments of Legal Affairs, Economic Affairs and Corporate Affairs and the Chairman-cum-Managing Director of CIL.

Coal India, which has a cash balance of about Rs 60,000 crore, will be the biggest disinvestment in the 2013-14 fiscal.

The government plans to raise Rs 40,000 crore by way of PSU stake sale this fiscal.
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