CIL staff to get 5% discount on IPO

Coal India (CIL) employees will get a 5 per cent discount on offer price in the government-owned company’s maiden public offer likely to hit the markets in July. The draft red herring prospectus (DRHP) is expected to be filed with the Securities and Exchange Board of India (Sebi) by June 15, company’s chairman Partha S Bhattacharyya told FC.

“The DRHP can be filed only after receiving the government’s approval,” he said. Initially, about 10 per cent equity of CIL will be on offer for public. About one per cent of company’s shares will be offered to CIL employees exclusively, for which the government has decided to allow 5 per cent discount. Another 3 per cent shares will be marked for the families displaced by CIL operations and mines. A total of 63.16 crore shares would be offered through the public issue.

Bhattacharyya said implementation of company’s on-going projects would become easier if it allotted shares to the affected people. CIL is implementing 134 projects, which are at various stages of implementation.

Price discovery for CIL will done using the conventional book-building process based on a band determined by the pricing committee headed by finance minister Pranab Mukherjee. The government will decide on discount to be offered to retail investors.

A coal ministry official said there was possibility of CIL floating a new trust which will hold the equity on offer for the project-affected people (PAP). The equity share for PAP would be higher than the employees’ share, he said.

The government awarded the navratna status to the PSU in September 2008 on the condition that it would get listed in the next three years. CIL is among the 20 PSUs that the centre proposes to list on bourses by selling up to 20 per cent stake in phases.

CIL contributes around 85 per cent of coal production in India. It has a sales turnover of over Rs 45,000 crore and employs nearly 4.25 lakh employees.

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