The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi approved the disinvestment of 10 percent paid-up equity capital in Coal India (CIL), an official statement said.
At present, the government shareholding in the coal mining company is 89.65 percent.
"The decision to disinvest would help the government realise an optimum price for the offer for sale of 10 percent of the government's shareholding in the company," it said.
The CCEA also cleared selling government's 5 percent paid-up capital in ONGC and "this would further broad base the shareholding of the company and would enhance disinvestment receipts". Government's stake in the company stands at 68.94 percent.

Besides these two, 11.36 percent disinvestment in hydro power generator NHPC was also approved. Government holds 85.96 percent stake in company.

At current market prices, the sale of shares in state- owned CIL, ONGC and NHPC could garner over Rs 23,000 crore, Rs 18,000 crore and Rs 2,800 crore respectively, helping the government meet its disinvestment target of Rs 43,425 crore for this fiscal.
Meanwhile, sources said the stake sale in the three companies would be done through the Offer For Sale (OFS) process, popularly known auction route.
The government has already selected merchant bankers for managing ONGC and NHPC disinvestment and is in the process for doing so for CIL.

ONGC shares closed at Rs 445.30, down 0.79 percent at BSE. CIL shares last traded at Rs 373.85 (down 1.80 percent) and of NHPC at Rs 22.40 (down 0.44 percent).

Government to sell equity stake in Coal India, ONGC, NHPC
Government likely to fetch Rs 43, 000 crore by equity sell
CCEA approves disinvestment of 10 percent paid-up equity capital in CIL
Government has 89.65 percent shareholding in coal mining company
Government selected merchant bankers for ONGC, NHPC
In 2013-14, government could raise Rs 16,027 crore as against budgeted target of Rs 40,000 crore
The previous government had cleared disinvestment in SAIL and according to sources the 5 percent stake sale in the state-owned steel maker is likely to hit the markets this month.
The sale of 5 percent stake or about 20.65 crore shares of SAIL at the current market price of around Rs 80.95 a piece would fetch the exchequer over Rs 1,600 crore.
The Cabinet had in July 2012 approved 10.82 percent stake sale in SAIL. Accordingly, the first tranche of disinvestment of 5.82 percent was completed in March 2013.
The government has missed its disinvestment target for five consecutive financial years.
In 2010-11 and 2011-12 fiscals, the government had raised Rs 22,144 crore and Rs 13,894 crore through disinvestment, against the budgeted target of Rs 40,000 crore in each year. In 2012-13, it had raised Rs 23,956 crore, as against the target of Rs 30,000 crore.
In 2013-14, the government could raise Rs 16,027 crore, as against the budgeted target of Rs 40,000 crore. The target in revised estimates was scaled down to Rs 16,027 crore.

Latest News  from Business News Desk