Kotak Mahindra Capital, JM Financial and Merrill Lynch are the other bankers chosen, an official said. As many as 18 merchant bankers had made presentations to the Disinvestment Department. (Agencies)
At Coal India's current market price of Rs 249.95 a share, the stake sale would fetch over Rs 7,893 crore to the exchequer. The government currently holds a 90 percent stake in the company.
The government intends to disinvest over 31.58 crore shares through an Offer for Sale through the stock exchanges.
Shares will be alloted to CIL employees at a 5 percent discount to the lowest cut-off price. A maximum of 10 percent of the offer will be kept for employees.
The Disinvestment Department pared a plan to sell a 10 percent stake in CIL to placate employee unions, which have threatened to go on strike.
Finance Minister P Chidambaram had earlier tried to assuage the workers unions, saying the disinvestment proceeds from the coal behemoth would be invested in PSU banks.
"...I told Coal India people every rupee that we get out of Coal India I am willing to put it in the public sector banks...So we are not converting assets into current expenditure. We are converting one asset into another asset," Chidambaram had said.
CIL was listed on the bourses in 2010 after the government raised Rs 15,199 crore by selling a 10 percent stake in the country's biggest initial public offering. The company has a cash balance of about Rs 60,000 crore.
The government plans to garner Rs 40,000 crore this fiscal by way of disinvestment and CIL's stake sale would be the largest. So far, the government has raised over Rs 1,325 crore through PSU stake sales.
Kotak Mahindra Capital, JM Financial and Merrill Lynch are the other bankers chosen, an official said. As many as 18 merchant bankers had made presentations to the Disinvestment Department.