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The government today said it is looking at selling 10 per cent stake in Coal India Ltd (CIL), the proceeds of which will be credited to Public Account, under the head National Investment Fund.
"Government is proposing to disinvest 10 per cent of GoI's equity in CIL out of its holding of 89.65 per cent," Minister of State for Coal and Power, Piyush Goyal told the Rajya Sabha in a written reply.
He did not specify any timeline for it. At today's closing share price of Rs 357.70, 10 per cent stake sale in CIL would fetch the government about Rs 22,000 crore.
Goyal admitted that trade unions were opposed to the idea of any further divestment in the world's largest coal miner.
"In the recent past five central trade unions operating in coal industry i.e. Indian National Trade Union Congress, All India Trade Union Congress, Bhartiya Mazdoor Sangh, Hind Mazdoor Sabha and Centre for Indian Trade Union Congress had expressed reservations on further disinvestment in CIL," he said.
CIL accounts for over 80 per cent of the domestic dry-fuel output.
Goyal said the government has approved restructuring of NIF last year and "decided that the disinvestment proceeds with effect from the fiscal year 2013-14 will be credited to the existing 'Public Account' under the head NIF and they would remain there until withdrawn/invested for the approved purposes."
He said the NIF would be utilised for purposes including subscribing to shares by CPSEs including public sector banks and insurance companies on rights basis so as to ensure 51 per cent ownership in these are not diluted.
Also it can be utilised for "preferential allotment of shares of the CPSE to promoter as per SEBI regulations, 2009 so that government shareholding does not go down below 51 per cent in all cases where the CPSE is going to raise fresh equity to meet its capital expenditure programme."
The funds could also be invested in recapitalisation of PSU banks and insurance companies, investment in RRBs/IFCL/ NABARD/EXIM bank, equity infusion in various metro projects, investment in Bhartiya Nabhikiya Vidyut Nigam and Uranium Corporation of India besides Indian Railways towards capital expenditure, he said.
Earlier this year the government had said that it is looking at selling CIL stake in the current fiscal to help meet its disinvestment target.
A planned stake sale in CIL last fiscal had to be deferred after stiff opposition from the trade unions. The coal major had to make up