10% stake sale in Coal India to raise Rs 24,000 cr
Reserve price of 2,100-MHz spectrum stands at Rs 3,705 crThe government on Wednesday decided to go for the biggest share sale ever by offloading up to 10 per cent stake in Coal India, which will fetch it up to Rs 24,000 crore at current market prices.
The government will sell 315.8 million shares, or 5 per cent stake, through an offer for sale, with an option to sell the same number of shares as a greenshoe option, Coal India said in a regulatory filing.
The disinvestment will help the government meet half of the Rs 43,425-crore revenue target from stake sales in the public sector, if the entire 10 per cent goes through.
At Wednesday’s closing price of Rs 384.05 a share, a 10 per cent stake sale in the world’s largest coal producer will raise Rs 24,257 crore.
The Union Cabinet on Wednesday approved a reserve price of Rs 3,705 crore per MHz for the auction of 2,100-MHz telecom spectrum from March 4, as recommended by the Telecom Commission. Auction of spectrum in the 800, 900, 1,800 and 2,100-MHz bands is expected to fetch the government Rs 90,000-100,000 crore.
The price approved by the Cabinet is about 35 per cent higher than what the Telecom Regulatory Authority of India (Trai) had recommended (Rs 2,720 crore for the 2,100-MHz band). Earlier, it had rejected the regulator’s suggestion of auctioning 20 MHz in this band and, instead, decided to offer a fourth of the amount in the coming auction. This has peeved telecom companies, which complain the move will lead to cut-throat competition and high spectrum prices.
Announcing the decision, Communications Minister Ravi Shankar Prasad said the auction would be “fair and transparent”.
“The reserve price is Rs 3,705 crore per MHz for 2,100-MHz spectrum. We have taken into account the market potential of this band…Spectrum trading and sharing norms are being finalised and will be notified soon. There is a campaign going around that there is spectrum deficit. But there is no deficit; whatever is available is being released,” he added.