Mumbai: State-run Coal India, the world’s largest coal miner, will file a draft prospectus for an initial public offering to raise as much as $3 billion early next week, three sources with direct knowledge of the matter said on Friday.
The company’s public offer of about 630 million shares, or a 10% stake, is expected to hit the market around 15 October, two of the sources said.
The government, bolstered by its success in share sales in two state-run firms this fiscal year, plans to raise up to Rs140 billion ($3 billion). If successful, that would be the biggest share sale ever by an Indian firm, surpassing utility Reliance Power’s $2.9 billion IPO in 2008.
Morgan Stanley, Citigroup, Kotak Mahindra Capital, Enam Securities, Deutsche Bank, and Bank of America-Merrill Lynch are the managers on the offering.
The sale is part of a government plan to sell stakes in about 60 state-run firms over the next few years, as it moves to cut a stubbornly high fiscal deficit and garner funds to spend on schemes for the poor.
The government plans to raise $8.6 billion through stake sales in fiscal 2011.
Since April, India has raised $260 million by selling shares in state-run utility SJVN’s IPO, and another $211 million through a share sale in Engineers India. Both offers saw strong response from investors.
Other government share sales in the pipeline this fiscal year include public offerings in Steel Authority of India Ltd, Hindustan Copper and Power Grid .
Coal India, based in Kolkata, produced 431 million tonnes in 2009-10 and accounts for nearly 80% of coal output in Asia’s third-largest economy. It posted net profit of Rs83.12 billion ($1.8 billion) in 2009-10, quadrupling from the previous year on the back of rising demand.