Coal India disinvestment to be taken by Cabinet this week

The government is likely to soon approve disinvestment of Coal India Ltd this week which may fetch the exchequer Rs 22,000 crore (Rs 220 billion).

The proposal for 10 per cent disinvestment of Coal India Ltd would be taken up by Cabinet Committee on Economic Affairs this week, sources said.

A planned stake sale in Coal India in the last financial year had to be deferred after stiff opposition from the trade unions.

The coal major had to make up for that by paying about Rs 19,000 crore (Rs 190 billion) as dividend to the exchequer.

The government, which holds a 89.65 per cent stake in CIL, initially sought to divest a 10 per cent stake but lowered it to 5 per cent on account of opposition from the unions.

At Thursday's closing share price of Rs 356.40, a sale of 10 per cent stake or 63.16 crore (631.6 million) shares in CIL would fetch the government more than Rs 22,428 crore (Rs 224.28 billion).

This will make up for more than half of the total disinvestment target of the current fiscal.

In the Budget, the government has estimated to collect Rs 43,425 crore (Rs 434.25 billion) from selling stake in PSUs and another Rs 15,000 crore (Rs 150 billion) from sale of residual stake in the erstwhile government companies.

Of the disinvestment target of Rs 40,000 crore (Rs 400 billion) in 2013-14, the government had mobilised Rs 15,820 crore (Rs 158.2 billion).

In 2012-13, of the Rs 30,000-crore (Rs 300-billion) target, Rs 23,957 crore (Rs 239.57 billion) was raised.

In 2011-12, only Rs 13,894 crore (Rs 138.94 billion) was raised of the Rs 40,000-crore (Rs 400-billion) target.