India’s Government plans to sell a 10% stake in country’s top coal producer, Coal India Ltd., to raise about 236.5 billion rupees (USD 3.6 billion) to help reduce the country’s fiscal deficit, The Wall Street Journal reports.
The finance ministry has invited bids from bankers to manage the sale of the government’s stake in the company as part of New Delhi’s broader disinvestment plan, which it hopes will raise as much as 695 billion rupees (more than USD 10 billion) this fiscal year started April 1.
The government’s present ownership in Coal India is 78.65%. It intends to sell the new stake through auction on stock exchanges, according to a notification on the finance ministry’s website.
In company’s annual report, is says that Coal India might spend Rs 10,600 crore (USD 2 billion) to raise its production capacity and modernize the infrastructure.
In June, Coal India annouced that held talks with Indian Railways to buy wagons that carry coal. The investment was estimated at 5,000 crore (USD 1 billion). In addition, in February, the company planned to form joint ventures with Indian Railways and private companies for rail projects that can generate revenue from third parties that use the facilities.