India's leading public sector coal miner, Coal India Ltd's proposed initial public offer for sale of equity shares is likely to hit the market in September.
Minister of State for Coal Sriprakash Jaiswal was quoted saying that the mandatory approval from the Cabinet for the state-run company's proposed IPO is expected within a few weeks.
Coal India will file the draft red herring prospectus with the regulator Securities and Exchange Board of India for the IPO in June, he said.
Government proposes to sell 10% of its equity stake in the state-run Coal India Ltd through the IPO and keep the proceeds. It hopes to raise Rs 120 billion via the proposed stake sale, the company's Chairman and Managing Director Partha Bhattacharya had said earlier this year.
Coal India, the virtual monopoly coal producer in India, will not issue fresh equity shares to raise money for itself in the proposed IPO as it has sufficient cash balance of Rs 300 billion available with it, he had said.
Government's 10% share sale will include sale of 1% equity shares to the company employees at 5% discount on the sale price.
Coal India has about 400,000 employees, almost all of whom are employed with the subsidiary companies, with only about 5,000 people employed with the parent company.